• Phillips 66 (PSX) and Citgo Petroleum lead initial purchases of Venezuelan crude at discounts of $8.50-$9.50 per barrel below Brent benchmark.
  • Sales generate approximately $500 million, with prices roughly 30% higher than under previous administration, according to Energy Secretary Chris Wright.
  • U.S. Gulf Coast refiners leverage existing infrastructure to process heavy sour crude without additional capital investment, addressing global supply constraints.

In a significant shift for U.S. energy markets, refiners including Phillips 66 and Citgo Petroleum have begun purchasing Venezuelan crude directly, capitalizing on Washington's authorization to facilitate sales after President Nicolás Maduro's ouster in early January 2026. The moves come as the U.S. lifted sanctions on Venezuela's oil exports on January 29, with restrictions remaining only for sales to Cuba, certain Chinese companies, and oil-for-debt arrangements.

Phillips 66, operating the 265,000 barrel-per-day Sweeny refinery in Texas and the 264,000 b/d Lake Charles facility in Louisiana, is among the first to secure cargoes. CEO Mark Lashier stated the company can process up to 250,000 b/d of Venezuelan heavy crude without requiring additional capital investment, thanks to infrastructure already designed for heavy sour grades. "We'll expand purchases as long as pricing remains competitive with alternatives," Lashier said, according to people familiar with the matter. The refiner bought through Geneva-based trading house Vitol, part of initial sales under the program that have generated about $500 million.

Citgo Petroleum, the seventh-largest U.S. refiner with 800,000 b/d total capacity, purchased its first Venezuelan crude cargo since 2019 sanctions—500,000 barrels from commodity trader Trafigura. This development is particularly notable as Citgo was previously denied access even during sanctions relief periods. The company, currently being acquired by an affiliate of Elliott Investment Management in a court-ordered auction, did not respond to requests for comment on the transaction.

Valero Energy (VLO) also ramped up purchases, expecting Venezuelan crude to serve as a major heavy feedstock this quarter after installing a new coker at its 380,000 b/d Port Arthur facility in 2023. Like Phillips 66, Valero bought through Vitol at discounts, with leadership emphasizing the commodity's importance moving forward. The deals mark a strategic shift toward independent trading houses newly empowered by the U.S. government, departing from historical reliance on Chevron (CVX) as the primary intermediary.

Millions of barrels of Venezuelan crude had accumulated in onshore and floating storage following a U.S. naval blockade initiated in mid-December to prevent illicit exports. Initial offers at $6-7.50 per barrel discounts to Brent generated little interest, but prices normalized as major refiners engaged. Before 2019 sanctions, U.S. Gulf Coast refineries purchased up to 800,000 b/d of Venezuelan heavy oil, highlighting the market's potential resurgence.

Chevron, which operated in Venezuela under a special sanctions waiver, plans to increase Venezuelan crude runs to 100,000-150,000 b/d capacity across its Gulf Coast and California facilities, according to sources. The reintegration addresses global heavy oil supply constraints while clearing Venezuela's storage backlog, generating immediate revenue during the political transition. Efforts to reach Vitol and Trafigura for additional details were unsuccessful.

Correction: An earlier version misstated the discount range; it is $8.50 to $9.50 per barrel below Brent, not $8-$10.