White House Unlikely to Sanction Venezuelan Crude, Source Says

  • Trump administration is weighing sanctions against Venezuela
  • Refiners say banning oil imports would hurt U.S. economy

The Trump administration is unlikely to ban imports of Venezuelan crude even as it considers a slate of sanctions on the country’s energy sector, said a person familiar with those White House deliberations.

U.S. officials have not made any decisions on what, if any, sanctions may be imposed on Venezuela, but they have serious concerns about the impacts of a crude embargo on domestic gasoline prices and the economy as a whole, said the person, who requested anonymity because the decision hasn’t been announced yet.

The administration’s caution comes as refiners lobby in Washington against the move, which would choke off supplies to U.S. refineries reliant on Venezuelan crude, including those owned by Valero Energy Corp., Phillips 66 and Chevron Corp.

The American Fuel and Petrochemical Manufacturers, the largest association of U.S. refiners, has urged Secretary of State Rex Tillerson, Commerce Secretary Wilbur Ross and other cabinet officials to exempt Venezuelan crude imports from a possible sanctions package.

"Sanctions limiting U.S. imports of Venezuelan crude would disadvantage many U.S. refineries, particularly those in the Gulf Coast and East Coast regions, that have optimized to utilize sour crudes produced in Venezuela," AFPM President Chet Thompson said in a letter to President Donald Trump sent Thursday. 

Refiners argue that cutting off the supply would squeeze their margins and raise gasoline prices.

Venezuela was the second largest supplier of crude oil in 2016 to the Gulf Coast, with 701,000 barrels daily, according to the U.S. Energy Information Administration. U.S. refineries imported 24.4 million barrels of crude from the country in April. Citgo Petroleum Corp., the U.S.-based refiner controlled by Venezuela’s state-owned oil company Petroleos de Venezuela SA, takes the largest share of those imports, followed by Valero, Chevron and Phillips 66.

The White House is considering sanctions against the socialist nation in light of President Nicolas Maduro’s May announcement that he will seek to re-write the country’s constitution. Anti-government protests in Venezuela have left at least 95 dead since April.

— With assistance by Lucia Kassai

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