Measurement and Testing

Will the US Ban Venezuelan Imports?

Aug 31 2017 Read 926 Times

Plagued by political instability and government corruption, Venezuela isn’t exactly a model trade partner. In a bid to clean up its act and disassociate itself from the South American nation, the United States has threatened to impose a ban on all crude oil imports from Venezuela.

Of course, sanctions always trigger a knock-on effect. If America does go ahead with its ban prices for heavy sour crude grades could soar, with Valero Energy Corp’s Vice President Gary Simmons warning that Venezuela will simply send its cargoes to markets other than the US.

US oil companies set to bear the burden

As one of America’s main recipients of Venezuela crude oil, Valero would be significantly affected by a national embargo. And it’s not the only company guzzling Venezuelan crude, with Phillips 66, Chevron and PBF Energy also noted as major buyers in 2016.

If the US decides to move forward with its Venezuelan sanctions refiners on the Gulf Coast could pay the price, with some experts warning that immediate sanctions would be “very disruptive.” A strict ban would likely trigger a cascade effect that would leave refiners scrambling to buy up what’s available and cut back their runs.

America starts to cut ties

Already the US Treasury imposed sanctions against 13 Government of Venezuela officials. This includes both the former and current vice presidents of finance for state-owned oil company Petroleos de Venezuela (PDVSA).

So what prompted the US to cut ties? The injunctions were imposed ahead of a planned controversial vote on July 30 that will empower the Venezuelan government with the muscle to rewrite the national constitution and dissolve state institutions.

Trump threatens “strong and swift” action

According to independent energy news platform Platts, a senior US administration official has warned that if Venezuelan President Nicolas Maduro approves the new laws, President Donald Trump will react with “strong and swift” sanctions. This includes a ban on Venezuelan crude oil sales into America, which could seriously disrupt both the American and the Venezuelan oil industry.

“The natural trade flow for a lot of Venezuelan production should be to the US Gulf Coast,” comments Valero’s Gary Simmons. “If sanctions were imposed, those barrels will continue to flow to other markets. And then, we’ll have to buy barrels away from other markets to supply our system.”

Given the volatile state of the oil market, efficiency is now front of mind for US crude producers. For a closer look at the technologies used to help heighten performance ‘How to Prevent Process Analytical System Failures’ outline the FDA guidelines that dictate the design, manufacturing and quality systems that contribute to improved control of production processes.

Read comments0

Do you like or dislike what you have read? Why not post a comment to tell others / the manufacturer and our Editor what you think. To leave comments please complete the form below. Providing the content is approved, your comment will be on screen in less than 24 hours. Leaving comments on product information and articles can assist with future editorial and article content. Post questions, thoughts or simply whether you like the content.

Digital Edition

Petro Industry News June / July 2018

July 2018

In This Edition... Fuel for Thought - A good year for Endress+Hauser - Dr. Shah honoured by Society of Tribologists and Lubrication Engineers - DURAG Group acquire AP2E Analytical Instru...

View all digital editions



Jul 30 2018 Moon Township, PA, USA

DXC 2018

Aug 06 2018 Westminster, CO, USA

Oil and Gas

Aug 09 2018 Madrid, Spain

ONS 2018

Aug 27 2018 Stavanger, Norway

Abu Dhabi International Downstream

Sep 03 2018 Abu Dhabi, UAE

View all events