Blitz Bureau
NEW DELHI: United States refining companies like Valero Energy and Marathon Petroleum are poised to profit if more Venezuelan oil starts flowing to the US. That is because these companies outfitted their facilities decades ago with that country’s oil in mind. 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 US Gulf Coast region, that have equipment to process it, according to a report in The New York Times.
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 don’t have to make long-term commitments or send any employees to the country.
Shares in PBF Energy, a midsize refining company, have climbed 15 per cent since US 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 per cent and 6 per cent.
“Having more Venezuelan crude available is upside for US refineries,” said Rick Weyen, a retired executive of a Texas refinery.
Last week, the Trump administration sketched out a plan that would have the US control Venezuela’s oil industry “indefinitely,” starting with 30 million to 50 million barrels of oil. Two trading giants, Trafigura and Vitol, are already helping to line up buyers for the oil.