American refining rivals Valero Energy (VLO) and Phillips 66 (PSX) have emerged among the first to snap up a discounted purchase of Venezuela’s crude oil, Reuters reported on Thursday, citing people familiar with the matter.
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The purchases mark one of the first such arrangements following President Donald Trump’s recent announcement that the U.S. will import up to 50 million barrels of sanctioned Venezuelan oil, a quota estimated to be worth about $2 billion. In addition, Valero Energy was one of several oil industry companies hosted by the White House recently to discuss investment in Venezuela’s oil industry following the U.S. capture of Venezuelan leader Nicolás Maduro earlier this month.
U.S. Refiners Snap Up Venezuela Oil at Steep Discounts
Sources told the outlet that the refiners bought a cargo each, with Vitol making the purchase from the Switzerland-based commodity trading house Vitol. The purchase was made at a discount of about $8.50 to $9.50 per barrel compared to Brent crude.
Furthermore, they said Vitol and its rival Trafigura — which were the first to be granted licences by the U.S. government earlier this month to trade in Venezuelan oil — bought the oil at a discount of $15 per barrel compared to Brent. This is even as U.S. Energy Secretary Chris Wright earlier on Friday revealed that the initial sales of Venezuelan heavy crude had been struck at that price level.
Chevron Poised for Broader U.S. License on Venezuelan Oil
Meanwhile, Chevron (CVX), which is the only U.S. oil company with an active presence in Venezuela, is expected to receive additional licenses from the U.S. government to expand its oil output from the Latin American country. Wright previously told the outlet that the Trump administration is working as fast as possible to make this happen.
What Are the Best Oil Stocks to Buy?
The TipRanks Venezuela Oil Recovery Stocks page provides insight into which U.S. oil companies are expected to benefit from increased American presence in Venezuela’s oil and gas industry. Kindly refer to the image below.
