Venezuelan crude is proving hard to sell at scale even after February 2026 US sanction relief because the marginal barrel is extra heavy, refinery constrained, and increasingly stranded in logistics.
Trading houses authorized to market Venezuelan crude, including Vitol and Trafigura, are struggling to place volumes as US Gulf Coast refiners hit practical limits absorbing a sudden influx of heavy sour barrels, with multiple cargoes lingering at sea.
Kpler referenced data showed Venezuelan crude on water rising to about 23.6 million barrels in early January 2026, then about 16.4 million barrels still on water in late January.
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US-bound flows were slated to rise about 13% in February to roughly 7.08 million barrels, but tanker tracking showed over a dozen vessels laden with Venezuelan crude idling in the Caribbean or heading toward US ports including Houston.
The stress point is crude quality. Venezuela’s flagship Merey is a heavy sour grade that competes for scarce coking and residue upgrading capacity, and only a subset of US refineries can economically run high shares of such material without bottlenecks.
Even within PADD 3, not all plants are equally equipped. Estimates indicate Gulf Coast refineries could absorb an additional 300,000–400,000 bpd of Venezuelan heavy without major upgrades, while broader US constraints include that only about half of refineries have cokers and that limited coking capacity.
In addition, market color describes Venezuelan Merey trading at a $10–$15 per barrel discount to Brent, positioned cheaper than Canadian heavy equivalents, yet the barrels still struggled to clear because refinery hardware, not just price, is the binding constraint.
The economics are now colliding with revenue expectations. Potential revenue gains is estimated at around $12.6–$13.5 billion under assumptions of 500,000–700,000 bpd at $70–$75 per barrel pricing.
The near term outcome is a classic throughput problem: policy opened the spigot, but crude quality, refinery configuration, and logistics determine how quickly barrels become cash. February’s visible backlog suggests realization will be gated by upgrades, re optimization, and the pace at which heavy crude discounts can pry open incremental coker demand.
Information for this briefing was found via the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
