(MENAFN- ValueWalk) Continuing major changes in global oil flows this week. With big consumers like and South Korean refiner making their first-ever purchases of U.S. crude exports.
Get The Timeless Reading eBook in PDF Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.
We respect your
/ Pixabay
And in Iran this week, the nation saw its first crude swaps in 7 years — with shipments of oil from Turkmenistan, to be swapped with shipments sailing out of the Iranian Persian Gulf.
But elsewhere, an even bigger shift in oil markets may be underway. With sources saying one of the world's largest consuming markets is readying for a major supply dislocation.
The U.S. Gulf Coast.
Bloomberg that Gulf refiners are preparing to lose one of their largest suppliers of crude: Venezuela. With sources saying that crude buyers here have begun making inquiries with producers in Canada to source alternate oil shipments.
The move comes as the Trump administration has been toying with the idea of sanctions on Venezuela. Which could prevent inflows of Venezuelan heavy oil — a staple of the Gulf Coast refining sector for decades.
At the same time, sources said that Venezuela's exports to the U.S. are dwindling — because of commitments the indebted nation has with other crude buyers abroad.
India and China particularly are owed large quantities of crude by Venezuela, due to cash-for-oil deals over the last few years. Meaning that supplies are increasingly being diverted to these markets from the U.S.
Here's the most telling fact on this brewing crisis: one of the refiners reportedly seeking Canadian crude is Venezuela's own Citgo — a unit of state oil company PDVSA, which operates refineries in Texas and Louisiana.
The fact that this Venezuela insider is pushing the panic button on imports shows just how serious supply disruption threats are. Suggesting that big changes in crude flows may indeed be at hand.
If so, these could be challenging times for U.S. refiners — as they scramble to find alternate supplies. Canadian producers would of course benefit — especially those specializing in the heavy oil most Gulf refineries are configured for — provided they can find shipping routes to get their crude all the way to the Gulf Coast.
U.S. sanctions on Venezuela would only speed this process — although several Gulf Coast senators appealed to the White House this past week to in the interest of energy security.
Watch for next moves from the Trump administration, and for further data on Venezuela's exports to America, through sources like the .
Here's to making the switch,
Dave Forest
Article by
MENAFN1508201701980000ID1095737033
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.