Some of the biggest early winners in the Trump administration’s efforts to assert more control over Venezuela’s energy industry are not the companies that produce oil but the ones that transform it into gasoline, diesel and other products.
U.S. refining companies like Valero Energy and Marathon Petroleum are poised to profit if more Venezuelan oil starts flowing to the United States. That is because these companies outfitted their facilities decades ago with that country’s oil in mind.
Much as there are different kinds of apples, not all oil is the same. Venezuela’s main type of crude is especially hard to handle — viscous and tar-like — and for that reason it generally is cheaper than the varieties found under American soil. That makes it appealing for refineries, like those in the U.S. Gulf Coast region, that have equipment to process it.
And unlike oil producers such as Exxon Mobil or ConocoPhillips, which have to weigh whether the risks of operating in Venezuela are worth it, these refiners have little to lose because they don’t have to make long-term commitments or send any employees to the country.
Investors have taken notice. Shares in PBF Energy, a midsize refining company, have climbed 15 percent since U.S. forces captured Nicolás Maduro, Venezuela’s president, outpacing the broader market by a wide margin. Valero and Marathon, which are much larger, have seen their stock prices rise by about 10 percent and 6 percent.
“Having more Venezuelan crude available is nothing but upside for U.S. refineries,” said Rick Weyen, a retired executive who used to coordinate the shipment of oil to a Texas refinery.
This boost would extend what has been a profitable run for refiners. These companies tend to benefit from lower oil prices, so long as there is still healthy demand for the products they make. They also made a lot of money during and soon after the Covid-19 pandemic, as fuel demand recovered.
It is too early to say exactly how oil flows will shift after Mr. Maduro’s ouster. But if past is prologue, the United States will soon be importing more oil from Venezuela.
Back in 2018, before President Trump imposed some of his most sweeping sanctions on Venezuela during his first term, the United States imported around 506,000 barrels of the country’s oil a day, federal data shows. By last fall, those imports had fallen about 75 percent.
Last week, the Trump administration sketched out a plan that would have the United States control Venezuela’s oil industry “indefinitely,” starting with 30 million to 50 million barrels of oil, presumably what is being stored in the country or on tankers floating offshore. Venezuela’s government has not confirmed many of the details, but two trading giants, Trafigura and Vitol, are already helping to line up buyers for the oil.
Much of the stored oil is likely to flow to the United States. Not only is Venezuela’s oil suitable for American refineries, the Gulf Coast is also relatively close to Venezuela, reducing shipping costs.
“We’re more than happy as this opportunity expands for us to further invest in our refineries to produce more,” Lane Riggs, Valero’s chief executive, said last week during a meeting between oil executives and Mr. Trump at the White House. Mr. Riggs noted that his company had refineries that were “uniquely configured to run Venezuelan oil.”
Valero, based in San Antonio, generally has been one of the biggest U.S. buyers of Venezuela’s oil, according to an analysis of federal data by the investment bank TD Cowen. Marathon, of Findlay, Ohio, has said it would bid for Venezuelan oil.
If more cheap oil finds its way to the United States, American consumers are likely to benefit from less expensive fuel, particularly diesel and jet fuel. Any decline in prices may be modest, however, as Venezuela produces only about 1 percent of the world’s oil and significant growth would take time.
Importing more oil from Venezuela would most likely hurt oil producers in Canada, which have been supplying most of the heavy oil that the United States uses.
But Doug Terreson, a former energy analyst who now serves on the board of the refining company Phillips 66, noted that even 30 million to 50 million barrels would not go all that far. The United States refines around 17 million barrels of oil every day.
“Is that a meaningful amount of oil? It doesn’t hurt, but it’s two days of supply,” Mr. Terreson said.
In the longer term, the big question for U.S. refiners — and Venezuela itself — is whether the country can meaningfully increase its oil output. And if so, by how much.
Another factor is concern about climate change. Mr. Trump has repeatedly rejected the science behind global warming, but a future administration might not. Producing and transporting Venezuela’s heavy oil generates a lot more greenhouse gas emissions, making it less attractive for companies and governments that want to slow climate change.
Rebecca F. Elliott covers energy for The Times.
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