- Home
- Business
- Sanctions Against Venezuelan Oil Sector to Hit US Refineries in First Place - Think Tank
Sanctions Against Venezuelan Oil Sector To Hit US Refineries In First Place - Think Tank
Fahad Shabbir (@FahadShabbir) Published March 01, 2019 | 02:00 AM
MOSCOW (UrduPoint News / Sputnik - 01st March, 2019) The US sanctions against Venezuelan state oil company PDVSA will become the main blow to the world's oil refining in the short term, yet it is the US refineries that will bear the brunt in the first place, a monthly outlook by the Skolkovo Energy Center said on Thursday.
According to the outlook, due to the OPEC-non-OPEC oil output cut deal, as well as US reinstated sanctions against Iran and Venezuela, the market is facing a risk of shortage of heavy oil grades, which has already affected their prices. In late January-early February, for instance, in the North American market, the differential between Mars and WTI was $1-1.5 per barrel, while by mid-February it rose to $7 in favor of heavy crude Mars.
"The increase in prices of heavy oil grades affects the amount of a processing margin. The fact is that refineries that are set up to process heavy oil cannot quickly switch to light oil since it would require investment and time. If the world oil refining could still keep up with the growth of production in the United States and the decline in output in the countries of the OPEC-non-OPEC deal, the sanctions against Iran and Venezuela have turned out to be critical," the outlook said.
Meanwhile, many refineries in the Gulf of Mexico depend on imports of heavy oil, including Venezuelan oil.
"In the short term, the sanctions on imports of Venezuelan oil will become the blow to refining, mainly to refining in the United States," the experts concluded.
Venezuelan oil can be replaced by supplies from Canada, Saudi Arabia, Mexico, Iraq and Colombia. However, Mexico is facing a decline in oil production, while the increase in deliveries from Canada depends directly on the pace of expansion of oil pipelines, which means that both countries have limited capacities to boost exports in the short term, according to the experts.
On January 28, the United States blocked $7 billion in PDVSA assets in its jurisdiction and imposed a ban on deals with the entity as part of efforts to facilitate a power transfer in the crisis-torn Venezuela. US Treasury Secretary Steven Mnuchin told reporters that by blocking PDVSA assets, the United States was taking care of this company in the interests of the Venezuelan people. Caracas has slammed the move as unlawful and accused Washington of seeking to get its hands on Venezuelan oil reserves.
Related Topics
Recent Stories
DP World ILT20 Season 3 to begin from 11 January 2025
Sharjah Public Library unveils interactive arts and crafts journey at SCRF 2024
"Wonder Walks” show makes an enthralling debut at SCRF 2024
Remarkable Young Minds Light up the Stage at Sharjah Children’s Reading
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 12 May 2024
Today Gold Rate in Pakistan 12 May 2024
Crown Prince Mohammad bin Salman's visit schedule being discussed
Govt decides to procurement wheat from farmers
Deputy PM to pay 4-day visit to China from Monday
Pakistan seeks foreign investments in diverse sectors: PM
Digital transformation key priority for govt to improve tax collection: Aurangze ..
President-designate of COP29 for collective efforts to deal with climate change ..
More Stories From Business
-
Commissioner directs early completion of public welfare projects
4 hours ago -
306 mini-petrol pumps removed
4 hours ago -
10 Kanal state land reclaimed on ombudsman’s orders
4 hours ago -
Seminar on “Taxation and E-Filling of the Income Tax” held at HCSTSI Secretariat
4 hours ago -
PBF presents budget proposals to relevant ministries
5 hours ago -
PCMEA meeting discusses intl. exhibition's preparations
5 hours ago
-
PFC budget proposals sent to Punjab govt: Mian Kashif
5 hours ago -
'FTO directs advisors to resolve businessmen issues immediately'
5 hours ago -
PIDE organizes conference on 'The Economy of Azad Jammu and Kashmir'
6 hours ago -
Pak-Uzbekistan commodity market leaders agree for joint plan of action
6 hours ago -
STZ is an environmental project-DC
8 hours ago -
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 12 May 2024
12 hours ago