Naphtha shipments to Venezuela loading in January have come entirely from US Gulf coast suppliers, reversing the previous Russia-dominated trade for the diluent needed to transport Venezuelan crude after US intervention.
Ports in Houston, Beaumont and Corpus Christi, Texas, have shipped between 970,000-1.22mn bl of naphtha to Venezuela so far this month, according to Kpler and Vortexa data, compared to 560,000-1.21mn bl for the last three months of 2025, when Chevron was the only oil major with a US government waiver to trade with Venezuela.
Vitol has joined commodity trader Trafigura in this naphtha trade, after the US physically removed Venezuelan president Nicolas Maduro from power and cracked down on sanctioned vessel shipments to and from the country, cutting the primarily Russian flow of the diluent to Venezuela.
Since 2023 Venezuela has been the importer for the majority of Caribbean-bound naphtha, and was typically the second-largest buyer of US Gulf coast naphtha, before the US government removed sanctions waivers in May 2025. Buyers in the country primarily import naphtha on long range 1 (LR1) tankers, while the US Gulf coast spot market for refined product shipments is typically dominated by medium range (MR) tankers.
Rising Venezuelan demand could spur additional LR1 demand from the US Gulf coast, which primarily trades as a backhaul for more liquid LR1 markets in deeper Pacific basin ports, especially for Mideast Gulf loadings. This could also affect the MR tanker market as other Caribbean naphtha buyers look to stock up ahead of further Venezuelan demand.
Chevron sought an MR tanker for a US Gulf coast-Caribbean voyage on 27 January to load naphtha between 30 January and 1 February. A charterer later fixed at least one Caribbean-bound MR tanker at a $900,000 lumpsum on the same day, a 44pc jump in the voyage rate from the $625,000 lumpsum at the end of the trading day on 23 January. It is unclear if the second cargo was naphtha or another refined product.
Naphtha spot participants unimpressed
A swift rise in N+A naphtha prices on the US Gulf coast opened the arbitrage to the region, following the new supply agreement between the US and Venezuela. Differentials for heavy naphtha, the primary grade use as a Venezuelan diluent, shot up by more than 10¢/USG just before the first US naphtha shipment in early January.
By mid-January, N+A naphtha differentials gave up all the gains. Selling interest for US Gulf coast naphtha diminished following the open arbitrage, potentially setting a precedent that sellers wanted to avoid in an already long market.
A cargo of naphtha from Huelva, Spain, was booked for the US Gulf coast on 13 January with an estimated arrival of 3 February, shipping reports show. This supported the view that the naphtha arbitrage to the US Gulf coast was open.
The Huelva cargo was reportedly suitable for blending to the Venezuelan diluent naphtha specification, but this was not confirmed. The Venezuelan diluent naphtha specification was roughly gauged as 70pc heavy naphtha and about 20-30pc lighter naphtha.
Increased Venezuelan production in the longer run is not entirely bullish for US naphtha markets. Before Venezuelan production slowed during the regime of former president Hugo Chavez, Venezuela actively exported light naphtha from Jose and Las Salinas, primarily to the US Atlantic coast.
Increased Venezuelan rates would also elevate naphtha production, which could diminish appetite for US naphtha imports and displace US naphtha market share globally.
