U.S. Struggles with Overflow of Venezuelan Oil Amidst Surging Imports

Oil refiners on the U.S. Gulf Coast are grappling with a surge in Venezuelan crude shipments, creating pressure on prices and leaving some volumes unsold. This follows a flagship $2 billion supply deal between Caracas and Washington, aimed to ramp up Venezuelan oil exports.

The surge has created hurdles for U.S. refiners, who face reluctance to buy due to elevated prices, even as prices have seen declines. Trading houses such as Vitol and Trafigura, holding licenses to market Venezuelan crude, are encountering challenges in finding takers amidst increased competition from Chevron.

While heavy oil imports from Venezuela to the U.S. have increased, refineries require adjustments to handle the heavier crude, posing an additional bottleneck. Meanwhile, India's potential to relieve the situation could reshape trade dynamics following a new trade deal with the U.S.