Venezuela crisis
Overview
For the time being, the US is continuing to enforce its “oil blockade” of tankers carrying sanctioned Venezuelan oil. But if relations between Washington and Caracas improve and sanctions are eased, the dynamics of Venezuelan oil trade could be redrawn – more Venezuelan crude could make its way to refiners on the US Gulf Coast, with implications for those smaller independent Chinese refiners which emerged as the leading buyers of discounted Venezuelan crude in 2025.
Argus will be tracking developments in Venezuela closely. Our price indexes, particularly Argus WCS crude and Argus USGC asphalt provide transparency into the value of Venezuelan oil and our up-to-minute news and analysis explains what it all means for oil and wider commodity markets.
Related news and analysis
Naphtha flows to Venezuela via traders resume
Naphtha flows to Venezuela via traders resume
Houston, 12 January (Argus) — Trading company Vitol is set to export nearly 500,000 bls of naphtha to Venezuela under a new agreement with the US government, according to market sources. Details of the new supply agreement were not detailed or confirmed by Vitol or fellow-trader Trafigura, which was also involved in the transaction. Both companies are expected to begin working with the US government to market Venezuelan crude, with Trafigura saying last week during a televised meeting at the White House it expected its first Venezuelan crude to load this week . The 460,000 bl of naphtha were reported loaded on the Hellespont Protector on 11 January out of Pasadena, Texas, according to shipping data tracker Kpler. The cargo was headed to the Port of Jose in Venezuela. Venezuela requires heavy to full-range N+A naphtha as a diluent to transport its heavy crude production. A brief expiration of US sanctions against Venezuela in 2025 stemmed the US naphtha flow to Venezuela. The only company able to transact with Venezuela was oil major Chevron, which was awarded a special limited license in July 2025. Naphtha exports through Chevron resumed several months after the special license was created. Late last week, heavy virgin naphtha (HVN) prices at the US Gulf coast surged by more than 10¢/USG as suppliers anticipate fresh demand for exports to Venezuela. A steepened contango in the Nymex RBOB pricing basis for US N+A naphtha also discouraged prompt selling at lower outright values — a bullish indicator for N+A naphtha prices. Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US refiners could see quick boost from Venezuela oil
US refiners could see quick boost from Venezuela oil
Houston, 12 January (Argus) — US Gulf coast refiners that invested long ago in the capacity to run Venezuelan crude could see a quick boost from redirected Venezuelan cargoes in the aftermath of the capture of the country's president, Nicolas Maduro, by US forces. The US administration has signalled its intent to prioritise supply to US refiners by issuing a waiver to a global trading firm to resume purchases of Venezuelan crude, with the terms of the licence requiring that a specific volume must be sold to US buyers, sources told Argus. The US is in talks with leading trading firms and banks to immediately move 30mn-50mn bl of Venezuelan oil held in floating and onshore storage, US energy secretary Chris Wright said on 7 January. The US must first lift sanctions that since last year allow only Chevron to lift limited volumes of Venezuelan crude. But the sanctions waiver by the Treasury department's Office of Foreign Assets Control offers a workaround. Increasing production from Venezuela could take many years and considerable investment. But supplies that have been heading to China and other destinations could be directed toward the US and compete with Western Canadian Select (WCS) crude that is currently consumed in Gulf coast refineries, US refiner Phillips 66's chief executive, Mark Lashier, says. Phillips 66 owns and operates two large Gulf coast refineries that can process about 200,000 b/d of Venezuelan oil if the supply is available and the economics support it, chief financial officer Kevin Mitchell says. They are the 265,000 b/d Sweeny refinery in Old Ocean, Texas, and the 264,000 b/d refinery in Lake Charles, Louisiana. Phillips 66 is running about 500,000 b/d of heavy crude across its system and is a "heavy buyer" of western Canadian crude, Mitchell says. Any increase in imports from Venezuela should benefit US refiners with Gulf coast assets such as Phillips 66, PBF Energy and Valero, analysts at US bank Tudor Pickering Holt say. Venezuelan crude could be a welcome alternative to Mexican Maya for some Gulf coast refiners. Venezuelan grades tend to price at a discount to Maya, as they have lower gravity and higher acid content, Tudor Pickering says. Many US Gulf coast refineries were built originally to run heavy Latin American crude. But the development of Canadian heavy oil sands led to higher imports from that country, while the advent of domestic shale oil pushed many US refiners to change slates, adding capacity for lighter crude. Phillips 66 completed a project last year at the Sweeny refinery that enables it to run up to 60,000 b/d of light crude from the Permian basin. The firm has purchased Venezuelan crude from Chevron "on occasion", Lashier says. Chevron operates in Venezuela with state-owned PdV under a special waiver from US sanctions and imported about 120,000 b/d of crude from Venezuela to the US in December. The future of Citgo Other possible US takers of increasing Venezuelan crude availability include the three PdV-owned Citgo refineries — the 460,000 b/d Lake Charles refinery in Louisiana, the 165,000 b/d Corpus Christi plant in Texas and the 188,000 b/d Lemont refinery in Illinois. All three refineries have a high coking capacity and can handle heavy crude slates. The refineries, in addition to Citgo's lubricant plants and its midstream and retail assets, are being auctioned to satisfy debts owed by PdV. A US federal judge in November affirmed as the winner a $5.9bn bid from Amber Energy , an affiliate of US hedge fund Elliott Investment Management. The sale is pending and subject to regulatory approvals including by the US Department of Treasury's Office of Foreign Assets Control. Elliott declined to comment on the recent US actions in Venezuela and whether they could impact the sale. By Eunice Bridges WCS differentials USGC Venezuela crude imports USGC crude imports Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US naphtha market braces for disruption
US naphtha market braces for disruption
London, 12 January (Argus) — US naphtha and fuel oil markets moved in opposite directions against a backdrop of higher expected Venezuelan crude supplies to the US following its capture of the country's president, Nicolas Maduro. Venezuela's role in the products markets is concentrated in high-sulphur fuel oil (HSFO) export and naphtha import trade. US naphtha differentials firmed after energy secretary Chris Wright announced on 7 January that the US is negotiating with Caracas to "indefinitely" take over oil sales by state-owned PdV and supply the diluents and equipment needed to enable a boost in Venezuelan output. The US has a long history of selling naphtha as a diluent to Venezuela for use in transporting the heavy crude produced there, although sanctions and political tensions have undermined the trade. Heavy-virgin naphtha differentials gained 1.75¢/USG against the Nymex Rbob pricing basis on 7 January, with many sellers withholding offers in anticipation of renewed opportunities to export to Venezuela should there be any changes to the current sanctions regime. US naphtha exports to Venezuela have lagged its exports to other South American countries such as Brazil and Colombia, as well as to Asia-Pacific, as sanctions have curtailed the trade. But a six-month sanctions waiver from October 2023-April 2024 and a special licence issued to Chevron as a joint-venture partner with PdV have helped reinvigorate some naphtha trading activity. US Gulf coast naphtha exports to Venezuela fell to just over 40,000 b/d last year from above 55,000 b/d a year earlier, according to oil analytics firm Vortexa. But shipments waned in the second half of last year, as the US flip-flopped over whether to renew Chevron's special licence. No visible US naphtha exports have gone to Venezuela this year. Venezuela has turned elsewhere in the face of the lower US deliveries. Of its 88,000 b/d of naphtha imports last year, US shipments accounted for 47pc, while Russian receipts made up 41pc, or 36,000 b/d, while China shipped 8,000 b/d. That represents a potential opportunity for US shippers to supply an additional 30,000-40,000 b/d of naphtha to the Latin American country. When they go high, it stays low US HSFO differentials recorded the largest day-to-day losses since July 2025 in the US Gulf coast and New York Harbor markets on 7 January, driven by the developments in Venezuela, as prices fell to their lowest since January 2021. HSFO cash prices fell by $3.50/bl to a 60-month low of $47.20/bl on the Gulf coast and by $3.70/bl to a 59-month low of $50.90/bl in New York Harbor. The potential for more Venezuelan heavy sour crude to enter the US had more of an effect on HSFO than low-sulphur fuel oil (LSFO), as heavier grades yield more HSFO when refined and an abundance of heavy crude can lead to HSFO oversupply. US control of Venezuelan crude supply is expected to increase US HSFO availability as more Venezuelan crude would be refined in the US, rather than sent to Asia, market sources say. In addition to producing more HSFO when refined, an abundance of heavy crude also reduces refinery demand for HSFO as a feedstock, which increases HSFO supply and exerts further pressure on prices. HSFO has been supported in the Asia-Pacific market by expectations of a reduction in Venezuelan supplies to the region. Venezuela exported about 150,000 b/d of HSFO last year, based on Kpler data, with Singapore and Malaysia taking roughly a third of those flows. But a potential waiver enabling US firms to take Venezuelan product could redirect flows away from Asia. Any redirection of Venezuelan crude to the US away from China could also bolster demand from Chinese refiners for straight-run fuel oil as a refinery feedstock. By Daphne Tan USGC naphtha differential US HSFO prices Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US majors face dilemma as they mull Venezuela return
US majors face dilemma as they mull Venezuela return
New York, 12 January (Argus) — The largest US oil producers that President Donald Trump wants to see returning to Venezuela to revitalise its ailing energy sector face a tough choice. Few executives will want to get on the wrong side of Trump, but any serious effort to help rebuild the South American country's long-neglected oil infrastructure will require tens of billions of dollars — as well as government guarantees. Venezuela may sit atop the world's biggest proven oil reserves, but firms will need to be persuaded that it is worth their time and effort to try to exploit them. Oil producers will pledge at least $100bn to revive Venezuela's crippled oil sector, Trump said ahead of a meeting with top industry executives at the White House on 9 January. But capital discipline rules the boardroom these days when it comes to allocating resources, shareholders are in the driving seat, and the top oil companies have competing priorities in the coming years. "They've got other options," says Abhi Rajendran at Rice University's Center for Energy studies. "There's going to have to be a lot of risk mitigation that Washington can provide for there to be a meaningful incentive to dive head deep into Venezuela." With oil prices languishing near a five-year low because of a supply glut, there is hardly a market signal to rush back, especially to a country where companies including ExxonMobil and ConocoPhillips are owed billions of dollars in arbitration claims after having their assets seized in 2007. Immediate repairs to Venezuela's oil infrastructure could deliver a short-term production boost in the next year or so. The country's oil output has slumped to below 1mn b/d from over 3mn b/d in the early part of the 2000s. But anything beyond that would demand hefty investments and companies would need reassurances they were dealing with a stable regime in Venezuela, clarity around legal contracts as well as long-term support from Washington. "There are a lot of hurdles to clear before you can get super excited about investing in Venezuela, which would require a pretty large-scale investment," Rajendran says. Chevron would have a head start over rivals if a major effort to revive Venezuela's oil industry becomes a reality. The second-biggest US oil company has maintained a continuous presence in Venezuela even after other major producers departed. It operates in the country with state-owned PdV under a special waiver from US sanctions and imported about 120,000 b/d of crude from Venezuela to the US in December, according to ship-tracking data from Kpler. Big deal Wider US oil industry enthusiasm about heading back to Venezuela has been mixed so far, Treasury secretary Scott Bessent said. "The big oil companies who move slowly, who have corporate boards are not interested," Bessent said on 8 January. The view is different among independent oil producers and wildcatters, who are eager to take part, he added. But the prospect of tapping Venezuela's vast oil riches may yet prove tempting as companies seek out new opportunities to shore up their upstream portfolios for coming decades. "Venezuela's huge oil resource can play a part, even if the predominantly heavy crudes are at the other end of the spectrum from the advantaged barrels — low cost, low emissions and, in many cases, low risk — that are the primary focus of the industry going forward," argues energy consultancy Wood Mackenzie. Proximity to Gulf coast refineries may be an added bonus for US producers. But improved security will be a requirement before companies start deploying workers as well as a stable political and legislative framework. "Any new projects will also have to meet companies' strict economic screening criteria," Wood Mackenzie says. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Map: Primary Venezuelan oil assets
Timeline: Key Venezuela sanctions dates
