The Gulf of Mexico is turning into a parking lot for Venezuelan crude, as the U.S. sanctions on Petroleos de Venezuela SA essentially stop the flow of oil from the Latin America country.
Tankers holding about 6 million barrels of Venezuelan oil are floating in the U.S. Gulf Coast or heading there, according to data from cargo-tracking and intelligence company Kpler.
Eight ships signaling destinations in the U.S. such as Chevron Corp.’s Pascagoula, Mississippi, refinery are idling in the middle of the Gulf of Mexico or just north of the Yucatan Peninsula, sitting closer to the coast or steaming toward the Gulf.
Chevron has contingency plans to deal with the Venezuela sanctions, CEO Michael Wirth said on the company’s 4Q earnings call. The Pascagoula refinery has enough crude to last through the first quarter and possibly a bit beyond, he said.
"You don’t typically see crude vessels hanging out in the Gulf," said Reid I’Anson, an economic analyst at Kpler. "It’s clear Gulf refiners are struggling to find heavy crude. From Chevron’s perspective, they want to at least get this crude in the Gulf, sit it there, and have some contingency and optionality if they are unable to source heavy crude from elsewhere."
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