Us Oil's $10 Billion - Venezuelan Threat

Chevron, Valero, and others are asking for caution on a possible oil embargo

- Alex Nussbaum & Sheela Tobben

The Paramount Helsinki tanker docked in Pascagoula, Miss., on 23 July bearing the lifeblood of Chevron Corp.’s refinery there: 532,000 barrels of thick Venezuelan oil. Its arrival, as Venezuela’s democracy slid into what may be its final crisis, underscores the uneasy partnership the US oil industry has entered with a nation where democracy is breaking down.

From New Jersey to Texas, oil companies have come to depend on crude-soaked Venezuela to feed their massive refineries. Last year alone, more than 270 million barrels worth about $10 billion reached US shores—enough to produce about 5 billion gallons of gasoline. US refineries process a third of all Venezuelan oil. Now that vital flow could be stanched if, as industry leaders fear, Donald Trump’s administration considers embargoing all imports from the country to pressure Venezuelan President Nicolás Maduro to stop attacks on political opponents.

Concerned about instability, companies have been trimming imports from Venezuela for months, even as drillers pull their foreign workers from the country. However, the Latin American nation is still a key supplier for some of America’s biggest refineries. Last month the country accounted for more than a quarter of capacity at Valero Energy Corp.’s Port Arthur complex in Texas, according to US Customs data compiled by Bloomberg, and 43 per cent at Chevron’s facility in Pascagoula, the Gulf Coast town where the Paramount Helsinki unloaded.