Citgo Petroleum, the U.S.-based refiner formerly owned by Venezuela’s state oil firm PDVSA, has bought its first Venezuelan crude under U.S. control, anonymous sources with knowledge of the situation have told Reuters.
Citgo, which is the seventh-largest refiner in the United States with a total capacity topping 800,000 barrels per day (bpd), is in the process of being acquired by an affiliate of Elliott Investment Management in a court-ordered auction to pay off PDVSA’s debt to creditors.
Citgo was one of Venezuela’s top crude buyers until 2019, when the first Trump Administration slapped sanctions on Venezuela and PDVSA. Citgo has been denied access and dealings with Venezuelan crude even in subsequent reliefs of the sanctions, such as the license for U.S. supermajor Chevron to operate in Venezuela and export crude to the United States.
Following the capture of Nicolas Maduro and the U.S. taking control of the Venezuelan crude sales, Citgo is again able to buy crude from the world’s top oil reserves holder.
Due to its history of processing mostly the heavy sour crude from Venezuela, Citgo is one of the U.S.-based refiners best positioned to run its refineries on the heavy crude.
So, Citgo has bought a cargo of 500,000 barrels of Venezuelan crude from commodity trader Trafigura, one of the two global trading houses picked by the U.S. Administration to help market Venezuela’s oil, according to Reuters’ sources.
Millions of barrels of Venezuelan crude have amassed in onshore and floating storage in the month and a half since the U.S. initiated a naval blockade in the middle of December to prevent shadow-fleet vessels from leaving Venezuelan waters with illicit cargoes.
Since the U.S. Administration authorized Vitol and Trafigura to market Venezuelan crude, the trading giants have reportedly sold oil to U.S. refiners Valero and Phillips 66, as well as to Spain’s Repsol, and to the Saras refinery in Italy owned by Vitol.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com