Venezuelan crude sanctions could hurt US refiners, AFPM chief warns

A full or partial prohibition of Venezuelan crude oil imports as part of sanctions against that country’s government could harm US refiners, consumers, and the economy, American Fuel & Petrochemical Manufacturers Chet Thompson warned.

“It is our understanding that the administration is considering sanctions to address the troubling developments in Venezuela,” he said in a July 6 letter to US President Donald Trump.

Limiting imports of that country’s crude as part of sanctions against the government of President Nicolas Maduro would place US Gulf and East Coast refiners at a disadvantage because their plants have been reconfigured to process sour crude oil grades from South America, Thompson noted.

It also could affect the prices US consumers and businesses pay for their motor fuel, he added.

“Moreover, because crude oil is traded on an international market, there is no guarantee that sanctions against Venezuelan crude would have the desire effect of punishing the Maduro regime,” Thompson said.

If the US imposed sanctions, Venezuela simply would divert the crude to other recipient nations, “most likely trade competitors in Asia,” Thompson said. “In that case, the sanctions would be ineffective and would only harm US interests.”

Basically, Venezuelan crude plays an important role in the US refining system, providing both economic and security benefits, Thompson said. “While placing sanctions on oil imports from Venezuela would not deny a market for this internationally traded commodity, it would likely hurt consumers and businesses right here in the US,” he said.

Contact Nick Snow at [email protected].