Venezuela Oil Infrastructure Restoration Plan Triggers Surge in U.S. Refiners' Stocks

Valero, Phillips 66 Shares Surge
U.S. Refiners Poised for Short-Term Gains if Sanctions Ease

U.S. President Donald Trump’s announcement of a plan to restore Venezuela’s oil infrastructure has triggered a sharp surge in the stock prices of American oil refiners.

According to the Financial Times on January 5 (local time), shares of Valero, the largest importer of Venezuelan crude oil, closed up 9% that day. Phillips 66 rose by 7%, and Marathon Petroleum also saw its stock price increase by 6%.

This surge is attributed to expectations that, if the U.S. eases sanctions and Venezuelan oil production rebounds, refineries along the U.S. Gulf Coast will be able to secure large volumes of Venezuelan crude.

U.S. Secretary of State Marco Rubio stated on January 4 that American refiners along the southern Gulf Coast are “the best at refining (Venezuelan) heavy crude,” and added, “If the conditions are right, I believe there will be tremendous demand and interest from the private sector.”

The Trump administration’s plan is to oust the Nicol?s Maduro regime and revive Venezuela’s oil industry through investment from American companies, thereby generating significant profits. However, the reconstruction effort will require substantial costs and time.

Refineries along the southern U.S. coast are expected to benefit in the short term, as they can immediately import and refine Venezuelan crude if the U.S. lifts sanctions and grants import permits.

Currently, U.S. imports of Venezuelan crude stand at 100,000 to 200,000 barrels per day, a sharp decline compared to the 1.4 million barrels per day imported in 1997.

This is due to extensive restrictions on imports of Venezuelan crude under U.S. sanctions. At present, Chevron is the only American company authorized to operate oil businesses in Venezuela.

Until the U.S. imposed a maritime blockade last month, up to 80% of Venezuela’s oil exports were shipped to China.The Financial Times reported that, if sanctions are lifted, a significant portion of these volumes could be quickly redirected to the U.S.

The Financial Times also reported that a former Chevron executive is seeking to raise $2 billion (approximately 2.9 trillion won) in funding for Venezuelan oil projects.

Ali Moshiri, who previously headed Chevron’s Latin American operations, said that the arrest of Venezuelan President Nicol?s Maduro and President Trump’s call for American investment in Venezuela’s oil industry have created sudden opportunities. He is currently in discussions with institutional investors to secure private funding for several identified investment targets.