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U.S. Gulf Coast refiners are facing a tightening supply of heavy crude oil as Chevron’s operational role in Venezuela diminishes, a development driven by U.S. sanctions and geopolitical shifts. With Venezuelan crude exports to the U.S. declining, refiners are scrambling to secure alternative sources to meet their blending needs. This article explores the U.S.’s heavy crude requirements, the countries supplying this critical resource, and the challenges ahead as the energy landscape evolves.
The Heavy Crude Dilemma
Heavy crude, characterized by high viscosity and an API gravity of 20° or less, is a vital feedstock for U.S. Gulf Coast refineries. These complex facilities are optimized to process heavy, sour crudes into high-value products like diesel, asphalt, and motor fuels. The U.S. imports approximately 2.5–3 million barrels per day (bpd) of heavy crude to blend with lighter domestic shale oils, ensuring optimal refinery yields. In 2024, Venezuelan crude accounted for roughly 220,000 bpd of this supply, a significant portion facilitated by Chevron’s joint ventures with Venezuela’s state-owned PDVSA.
However, the Trump administration’s decision in February 2025 to revoke Chevron’s license to operate in Venezuela, effective April 3, 2025, has disrupted this flow. The license, initially granted in November 2022, allowed Chevron to export heavy crude grades like Boscan and Hamaca to U.S. refineries. With the May 27, 2025, expiration of Chevron’s extended wind-down period, Venezuelan crude exports to the U.S. have plummeted, leaving a gap of up to 200,000–300,000 bpd in heavy crude supply.
U.S. Heavy Crude Blending Needs
U.S. Gulf Coast refineries, with a processing capacity of approximately 9.6 million bpd, rely on heavy crude to balance the light, sweet crudes produced from domestic shale plays. Heavy crude’s higher sulfur content and density make it ideal for producing diesel and other middle distillates, which are in high demand. Refiners typically blend heavy crude at a ratio of 30–40% with lighter grades to optimize yields, requiring an estimated 2.5–3 million bpd of heavy crude imports to meet current refining demands.
The loss of Venezuelan supply exacerbates an already constrained market. Mexico’s heavy crude exports are declining due to increased domestic refining capacity, and Canadian heavy crude faces pipeline bottlenecks and potential U.S. tariffs. This creates a backfill requirement of 200,000–500,000 bpd for U.S. refiners, a gap that alternative sources struggle to fill.
Key Import Countries for Heavy Crude
The U.S. relies on several countries to supply heavy crude, but each faces unique challenges:
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Canada: The largest supplier, exporting over 4 million bpd of heavy crude, primarily from Alberta’s oil sands. However, pipeline constraints limit export growth, and proposed U.S. tariffs could further restrict flows. In 2019, Canadian heavy crude imports to the Gulf Coast increased by only 3% compared to the prior year, insufficient to offset Venezuelan losses.
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Mexico: A key supplier of heavy Maya crude, Mexico exported approximately 600,000–700,000 bpd to the U.S. in 2024. Declining production and increased domestic refining capacity are reducing export availability, tightening supply further.
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Colombia: Supplies around 200,000–300,000 bpd of heavy crude, but production declines limit its ability to scale up.
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Ecuador: Exports roughly 100,000–150,000 bpd of heavy crude, but environmental concerns and reduced financing from European banks, such as Natixis, threaten reliability.
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Iraq and Others: Middle Eastern countries like Iraq provide heavy crude, but logistical costs and quality differences make them less competitive. In 2019, Chevron imported Iraqi and Trinidadian crude to offset Venezuelan losses, but volumes remained 6% lower than 2018 levels.
Smaller suppliers like Brazil and Trinidad and Tobago contribute marginally, but their volumes are insufficient to replace Venezuelan crude fully. The U.K.’s North Sea crudes, such as Kraken and Clair, have seen increased exports to the U.S. (112,000 bpd in 2018), but these are lighter grades less suited for heavy crude refineries.
Notice one key point in the RBN Chart – “California production is likely in terminal decline.” That is an understatement, and a National Security issue for the Trump Administration.
Western Hemisphere Heavy Crude Production. Source: Future of Fuels
Challenges and Market Impacts
The reduction in Venezuelan crude supply is reshaping heavy crude markets. U.S. refiners, including Valero, PBF Energy, and Citgo, have actively sought Chevron-marketed Venezuelan cargoes, but PDVSA’s shift to exporting Boscan crude to markets like Malaysia and China signals a reorientation of trade flows. A 25% U.S. tariff on countries buying Venezuelan oil, implemented in April 2025, has further complicated global supply chains, stalling exports to China and creating bottlenecks at Venezuelan ports.
Refiners are also adapting by shifting to lighter crude slates, but this reduces yields of high-margin products and poses operational challenges. Valero, for instance, ran its lightest crude slate in nine years in 2019, with sweet crudes comprising 61% of its throughput, a trend that may intensify. Rising prices for domestic sour grades, like Mars Sour and West Texas Sour, reflect heightened demand, with Mars trading at a $6 per barrel premium to U.S. crude futures in 2019.
Chart: U.S. Heavy Crude Import Sources (2024)
To illustrate the reliance on key suppliers, the following chart shows the estimated heavy crude import volumes from major countries in 2024, highlighting Venezuela’s role before the recent sanctions.
Chart: U.S. Heavy Crude Imports by Country (2024)
Outlook for U.S. Refiners
The loss of Venezuelan heavy crude is a significant challenge for U.S. refiners, but it’s not insurmountable. Increased imports from Canada, despite logistical hurdles, remain the most viable option, with posts on X suggesting Gulf Coast refiners are already pivoting in this direction. Colombia and Ecuador could partially offset losses, but their limited production capacity and geopolitical risks pose constraints. Middle Eastern crudes, while available, are costlier and less compatible with Gulf Coast refinery configurations.
Refiners may also invest in upgrading facilities to process lighter crudes more efficiently, as seen with Citgo’s modifications at its Corpus Christi refinery. However, such adaptations require time and capital, leaving short-term supply gaps. The Biden administration’s brief easing of sanctions in 2022–2023 demonstrated the potential for Venezuelan crude to stabilize markets, but the current policy shift under Trump priorit EU recalls suggest a return to stricter sanctions is unlikely without significant political concessions from Venezuela’s government.
Conclusion
U.S. refiners are at a crossroads as Chevron’s reduced role in Venezuela disrupts heavy crude supplies. With a blending need of 2.5–3 million bpd and a shortfall of up to 500,000 bpd, the hunt for alternative sources is urgent. Canada, Mexico, Colombia, and Ecuador remain key suppliers, but each faces limitations that could drive up costs and reshape trade flows. As the energy market navigates these challenges, Gulf Coast refiners must adapt swiftly to maintain output and meet domestic fuel demand.
The downstream sector poses a significant challenge to United States National Security, as noted in the story “The Great Decline of California’s Energy Sector – Can the United States be ‘Energy Dominant’ with California dragging the U.S. down?”.
Green Energy policies and overregulation of the entire sector have cost untold billions, and we have lost the lead in downstream capabilities. This will resurface soon as a significant investment issue, along with higher costs for consumers.
We have seen administrations rob the strategic oil reserves to win an election, so short-sighted thought processes are just normal for U.S. political figures.
Stay tuned to Energy News Beat for updates on this developing story and more insights into the global energy landscape.
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Sources: The article draws on provided web results (e.g., Reuters, Bloomberg, RBN Energy) and X posts to ensure factual accuracy. Citations are included as per guidelines (e.g.,,).
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