As Venezuela Spirals, US Oil Confronts Threat… Bloomberg

Alex Nussbaum and Sheela Tobben, Bloomberg, do a nice job discussing what an embargo of Venezuela might do to US oil companies…

“From New Jersey down to Texas, oil companies have come to depend on crude-soaked Venezuela to feed their massive refineries. Last year alone, more than 270 million barrels worth about $10 billion reached American shores — enough to produce about 5 billion gallons of gasoline.”

“The prospect of a U.S. response that cuts off crude has been particularly unsettling for the likes of Chevron, Phillips 66 and Valero Energy Corp. which have spent billions calibrating their plants to handle Venezuela’s sludgy-but-abundant oil.”

“Refiners could turn to suppliers of heavy crude from Canada to Mexico to Iraq, but the move would ripple across global markets as other customers are shunted aside. It’s unclear how quickly alternate sources like Canada’s oil sands, most of which already go to the U.S., or Mexico, which is battling supply disruptions of its own, could fill the gap.”