U.S. Refiners Eye Direct Venezuelan Crude Deals Amid Expanding Trade Opportunities

U.S. refiners Phillips 66 and Citgo Petroleum are positioning themselves to procure heavy crude directly from the Venezuelan state oil company PDVSA, insiders reveal. Moving away from intermediary trading houses and Chevron, these refiners aim to enhance profitability. The shift follows new U.S. licenses enabling larger crude imports.

Phillips 66, a leading refiner, is seeking compliance to buy directly from PDVSA, insiders say. Plans involve chartering tankers for loading at PDVSA's terminals. Meanwhile, Citgo Petroleum is also in discussions to secure direct purchases, aligning with normal commercial transactions, having already sourced 500,000 barrels from Trafigura earlier this year.

The landscape presents obstacles, including the need for individual logistical and clearance arrangements amidst sanctions, which refineries must navigate. Venezuelan crude prices have recently softened as more oil is redirected from China to the U.S., offering refiners opportunities for cost-effective procurement if they can manage regulatory and logistical complexities.