By Marianna Parraga and Shariq Khan
HOUSTON/NEW YORK, Jan 28 (Reuters) – U.S. refiner Citgo Petroleum has bought Venezuelan crude oil for the first time since 2019, when it severed ties with its parent, state-run oil firm Petroleos de Venezuela, two sources familiar with the matter told Reuters on Wednesday.
The 830,000-barrel-per-day refiner, which is expected to be taken over by an affiliate of hedge fund Elliott Investment Management to pay Venezuela-linked creditors following a court-ordered auction, has the network in the U.S. that is most fit to process Venezuela’s heavy sour oil.
Citgo has been blocked from having access to Venezuelan barrels since 2019. The refiner severed ties with Caracas-headquartered PDVSA months after the re-election of President Nicolas Maduro, which the U.S. did not recognize.
This month, Maduro was captured by U.S. forces, and a flagship $2 billion deal to supply Venezuelan oil to the U.S. and other markets was agreed shortly after by Washington and Caracas, which is now ruled by the government of interim President Delcy Rodriguez. Since then, trading houses have been marketing and exporting millions of barrels of Venezuelan oil.
Citgo bought a cargo of about 500,000 barrels of Venezuelan heavy crude for February delivery from Trafigura, according to the sources, who requested anonymity to discuss confidential details.
Citgo and Trafigura did not immediately respond to requests for comment.
The deal marks a major milestone in U.S. efforts to normalize and potentially boost Venezuelan oil sales and revenue, which Washington took control of shortly after capturing Maduro. It is also key for Citgo, which in recent years has resorted to other Latin American heavy grades and to U.S. domestic crudes to fill the Venezuela void.
Citgo, which operates the seventh-largest refining network in the U.S., was acquired by PDVSA in the 1980s to guarantee an outlet for Venezuelan oil in North America. The company was among the largest buyers of the South American country’s crude until 2019, when Venezuela’s entire energy sector was hit with U.S. sanctions to pressure Maduro.
Citgo, the crown jewel of Venezuela’s assets overseas, had also been a key supplier of refined products to Venezuela.
Citgo had not been granted access to Venezuelan oil even when the sanctions were partially lifted in recent years, allowing other U.S. refiners to import cargoes through U.S. major Chevron .
U.S. government officials have said they fast-tracked the supply deals with trading houses Vitol and Trafigura, the first agreed after Maduro’s capture, to help clear a massive accumulation of oil inventories caused by a U.S. naval blockade of the country that forced cuts in crude output.
(Reporting by Shariq Khan in New York and Marianna Parraga in Houston; Editing by David Gregorio)
Comments