More Canadian crude headed to U.S. Gulf Coast as Venezuelan shipments grind to a halt

Venezuela’s exports to the U.S. hit zero last week after American sanctions on PDVSA.

American refiners took no crude from the Latin American country for the first time in government data going back to 2010.

Shipments have been on a steady downtrend since late January when the Trump Administration announced new sanctions on Venezuela’s state oil company. That extended a broader slide due to Venezuela’s struggles to maintain production.

American refiners looking to replace the lost Venezuelan heavy, high-sulfur oil aren’t likely to find any solace from OPEC. This week, the cartel and its allies indicated their commitment to keep to its latest production cuts in light of high global inventories.

Canada’s Alberta province is relaxing curtailments, but full pipelines remain a hurdle for shippers wanting to move additional barrels south.

Nonetheless, more Canadian oil is heading for U.S. buyers, according to data from the Energy Information Administration. Much of this traffic is through crude by rail operations.

According to the National Energy Board, PADD III imports of Canadian crude reached 839,570 bbls/d in December 2018 compared to 608,270 bbls/d in December 2017.

© 2019 Bloomberg L.P

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