Two major American oil refiners are working to establish direct purchasing agreements with Venezuela’s state-owned oil company, cutting out middleman traders to boost their profit margins, industry sources reveal.
Phillips 66 and Citgo Petroleum want to begin buying heavy crude oil straight from PDVSA starting in April, according to people familiar with the companies’ plans. Currently, these refiners purchase Venezuelan oil through trading companies and Chevron.
The push for direct deals follows recent changes in U.S. policy toward Venezuelan oil. Trading firms Trafigura and Vitol obtained the first American licenses in January to export Venezuelan crude as part of a $2 billion agreement between Caracas and Washington. Chevron has maintained authorization to operate in Venezuela and transport crude since last year.
The Trump administration expanded these opportunities last month by issuing broader licensing for Venezuelan oil exports. White House officials project this could increase trade to $5 billion in the coming months.
Phillips 66, among America’s largest refiners, is currently working through compliance procedures and seeking internal approval to purchase directly from PDVSA, three sources confirmed. The company intends to charter its own tankers to collect crude at Venezuelan terminals once clearance is obtained.
While declining to discuss specific commercial activities, a Phillips 66 representative acknowledged that access to heavy crude represents a valuable opportunity for their Gulf Coast operations, which can handle various crude oil types. The company previously purchased Venezuelan oil from Vitol last month at approximately $9 below Brent crude prices.
White House spokeswoman Taylor Rogers said Friday that the administration is managing significant interest from energy companies. “The president’s team is working around the clock to field requests from oil and gas companies,” Rogers stated.
Venezuela-owned refiner Citgo Petroleum is also pursuing direct crude purchases but faces logistical challenges. The company wants Venezuelan oil delivered to Gulf Coast facilities, which proves difficult given PDVSA’s limited shipping capacity, according to another source.
In an email statement, Citgo confirmed plans to utilize opportunities under the general license for direct Venezuelan crude purchases, aiming to process this oil at Gulf Coast refineries in upcoming months. The company made its first Venezuelan crude purchase since 2019 in January, buying 500,000 barrels through Trafigura for February delivery.
Valero, America’s second-largest refiner and a major buyer of Venezuelan oil through Chevron, plans to establish direct PDVSA purchases later this year after evaluating Venezuela’s loading infrastructure conditions. The company is significantly increasing Venezuelan oil imports, with up to 6.5 million barrels heading to Gulf Coast refineries in March, primarily through Chevron arrangements.
However, these expansion plans may encounter obstacles as Washington continues refining regulations for Venezuelan business dealings. The South American nation remains under economic sanctions, creating ongoing compliance challenges.
PDVSA has informed potential buyers they require individual licenses or specific Treasury Department clearance to collect cargoes at Venezuelan ports, sources indicated. Additionally, many American banks remain hesitant to finance Venezuelan oil transactions.
The increased Venezuelan oil flow to American markets has affected pricing. Venezuelan Merey crude is now being offered at $10 below Brent prices, down from $6-$7.50 below Brent last month, as more oil shifts from Chinese to American buyers.
Initial Venezuelan crude purchases by Vitol and Trafigura were negotiated at approximately $15 below Brent prices, generating $500 million in sales last month, according to Energy Secretary Chris Wright. These trading companies earned profits of up to $4 per barrel after covering transportation and storage costs.
