(Reuters) – Valero has bought a cargo of Venezuelan crude oil, two sources said on Wednesday. This is one of the first deals by the U.S. Gulf Coast refiner, part of an agreement between Washington and Caracas to export up to 50 million barrels.
Phillips 66 also purchased the cargo, one of the people said.
The companies bought the crude from trading company Vitol, which traded at a discount of about $8.50 to $9.50 per barrel compared to Brent crude for delivery to the U.S. Gulf Coast, the sources said.
Vitol and rival trading company Trafigura were the first companies to be granted licenses to trade Venezuelan oil by the U.S. government after President Nicolas Maduro left office in early January.
Valero and Phillips 66 have previously been buyers of Venezuelan crude through Chevron, a partner in Venezuela’s national oil company, but the deal marks the first U.S. purchase from the trading company, which was just approved this month to sell Venezuelan crude.
The sources declined to be identified because trade deal information is confidential. Mr. Valero, Mr. Vittle and Mr. Phillips66 did not immediately respond to requests for comment. The White House also did not respond to a request for comment.
Vitol and Trafigura bought Venezuelan crude at a price of $15 per barrel below the global Brent benchmark, the people said. U.S. Energy Secretary Chris Wright also said Friday that the first sale of Venezuelan heavy crude, worth about $500 million, was negotiated at a discount of $15 per barrel to Brent.
Trading companies will incur the cost of shipping crude oil to the U.S. Gulf Coast, which ranges from $2.5 to $3.5 per barrel depending on the size of the tanker, shipping officials said. That would mean reselling Venezuelan oil at a margin of $2 to $4 per barrel.
Offers to U.S. refiners for Venezuela’s main crude, Melei heavy crude, began last week at a discount of $6 to $7.50 per barrel to Brent, but prices fell due to lack of interest. Vitol and Trafigura have also offered Indian refiners $8 to $8.50 a barrel, lower than Brent prices, but these have also generated little interest.
Before sanctions were imposed in 2019, several major refineries on the U.S. Gulf Coast were buying and processing up to 800,000 barrels a day of Venezuelan heavy oil, according to U.S. government data.
Georgina McCartney and Aracey Somasekhar report from Houston. Additional reporting by Marianna Paraga and Shariq Khan. Editing: Christian Schmollinger and Edwina Gibbs
Share this:
