Why is Venezuela so Important for the U.S. Oil Market?


   
Maria Eugenia Garcia
DTN Energy Editor

   U.S. refining:

   * Most of the U.S. Gulf Coast refinery infrastructure was built to process 
heavy, sulfur-rich grades like Venezuelan crude oil. In the 2000s, half of 
Venezuelan oil exports went to the U.S.

   * Mexico, Colombia and Ecuador are suppliers of heavy sour crudes for U.S. 
refineries, but aging oil fields in those countries have translated into a 
declining production in recent years. Heavy sour crudes from Venezuela could be 
a natural replacement for those grades.

   * Venezuelan crude can replace costly Saudi Arabian heavy grades consumed by 
U.S. refiners, especially on the West Coast.

   * U.S. imports of Venezuelan crude returned from a three-year hiatus in 
2023, averaging 231,000 bpd in 2024 and 141,000 bpd last year, according to 
Energy Information Administration data.

   Crude production and reserves:

   * Venezuela is one of the members of the Organization of Petroleum Exporting 
Countries with one of the largest proven reserves in the world. Nearly 303 
billion bbl, according to OPEC data. The country is exempt from OPEC production 
curtailment agreements.

   * Production peaked at 3.45 million bpd in the late 1990s and has been 
stable around 2.35 million bpd in the years prior to the U.S. shale boom, 
according to Platts data. The oil price crash and consequent lack of revenues 
and reinvestment led Venezuelan crude production to plummet below 1 million bpd 
by 2019.

   * Production has gradually increased since troughing at 280,000 bpd during 
the height of the pandemic induced demand crash in mid-2020. In 2025, 
production averaged 937,000 bpd, according to Platts' OPEC production survey.

   * Sludgy Venezuelan crude requires diluents to be piped onto tankers such as 
naphtha or high gravity crude oil. Venezuela is a potential consumer of U.S. 
light crudes which can be used as a blender for extra-heavy Venezuelan grades 
with 16 API gravity. The first export of U.S. crude to the international 
markets in 2016 had Venezuela as a destination.




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