From the BBC, April 9:
The US refinery now processing Venezuelan oil
The Minerva Gloria is docked at a wharf in the Mississippi Sound, not far from the US's vast oil reserves in the Gulf of Mexico.
The ship, 820ft (250m) long, painted navy and burgundy, is carrying precious cargo from Venezuela that, just six months ago, would have been impossible to bring to the US - 400,000 barrels of crude oil.
Venezuela has the world's largest oil reserves. Under Venezuela's former president Nicholas Maduro oil exports had dropped significantly, due to a lack of investment. Then came US sanctions against any imports from the Latin American country.
But US President Donald Trump vowed to tap those reserves after the US military captured Maduro in a surprise, night-time raid in January.
Now the oil is flowing again in Venezuela. In March, the country's monthly crude exports surpassed one million barrels per day. The first time since September.
As the world reels from the impact on global energy prices caused by Iran blocking the Strait of Hormuz, big oil and gas companies like Chevron are now importing Venezuelan crude oil by the shipload.
"It's a big deal not only for Chevron but the entire Gulf region," says Tim Potter. He is the director for Chevron's oil refinery in Pascagoula, Mississippi, the company's largest operation in the US. It is also the only major US oil company currently operating in Venezuela.
Together this means that Chevron can extract its own Venezuelan oil, process it itself, and get it directly to the US consumer.
"It's a pretty big incentive for us to run it," Potter says. "The refinery was really designed, and we invested in the refinery, to run heavy oils like from Venezuela."
Venezuelan crude oil is relatively cheap to buy because it is much more difficult to process. It is very heavy, thick, dark and high in sulfur, often called a sour oil. It is used to make diesel, gasoline (petrol), jet fuel and other products.
Chevron now imports the equivalent of 250,000 barrels of Venezuelan crude oil per day, on average, says Andy Walz, president of downstream, midstream and chemicals at Chevron.
"We think we can take that up another 50% so call it somewhere around 350,000 to 400,000 barrels a day of just the Chevron share of our position in Venezuela."
What Walz means by the US's "position in Venezuela" is that while Chevron is the only US company that has extracting capabilities in the country, others are buying Venezuelan oil from domestic producers.
Chevron is also not the only player when it comes to oil refining in the US. There are 132 refineries in the US that run on a mix of crude oils. And nearly 70% of US refining capacity runs most efficiently with heavier crude.....
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The Venezuelan oil won't translate into cheaper gasoline prices until the supply from the Middle East is regularized but then, because it is an addition at the margin it should clip a few pennies off the pump price.
As for Venezuela, here's the journal Americas Quarterly, April 6:
Venezuela’s Economy Is Accelerating, But Will Depend on More Than Oil
Pending reforms will determine whether momentum is sustainable under interim President Delcy Rodríguez.CARACAS—After 19 consecutive quarters of moderate growth, Venezuela’s economy is showing signs of a remarkable breakthrough, with an expansion of some 12% now possible this year. The open question is whether this truly marks the start of a new era—or another short-lived rebound tied to oil and external conditions....
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