The Strategist

US refineries find replacement for Venezuelan oil


03/28/2019 - 14:15



Sour crude oil from Shell and BP platforms in the Gulf of Mexico will replace Venezuela’s heavy oil in many US refineries. Now they need alternative sources of oil after the US sanctions were imposed on the Venezuelan oil industry, reports Reuters.



pixabay
pixabay
BP and Shell are also major operators and manufacturers in the US Gulf of Mexico. Their crude oil is purchased by US refineries, with preference being given to the Mars grade from a platform operated by Shell with a partner BP.

Mars prices rose after the United States imposed sanctions against Venezuela. This was facilitated by a decrease in the supply of medium and heavy oil, the IEA report said in March.

On Monday, Reuters news agency, citing data from company executives and market participants, said that prices for Mars oil had jumped to the highest level in the last 5 years.

As Marathon Petroleum Corp CEO Gary Heminger told Reuters, the largest US refinery now buys more Mars.

This month, Heminger said that the US sanctions against the Venezuelan oil industry did not have a significant impact on the company's operations. Venezuelan crude provided only a small percentage of the millions of barrels of oil that the refinery buys every day. He added that most US refineries are reducing purchases of Venezuelan oil.

After introduction of sanctions, Marathon Petroleum and Valero Energy have started buying Mars from the Shell business division. Phillips 66 buys the Southern Green Canyon variety from Shell, according to sources familiar with the situation.

Shell and BP representatives showed no interest in oil reserves in the Gulf of Mexico against the background of US sanctions against Venezuela. However, they told Reuters that this interest remains on the market.

According to the EIA, in 2018, production in the Gulf of Mexico reached a record 1.679 million barrels per day. It is expected that in 2019, production will increase, as new fields will be commissioned.

source: reuters.com




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