"I suspect it will remain at zero," said Raffin Fitzmauris, Rabobank energy strategist, "We really need that heavy raw material coming from Venezuela. We believe it is difficult to get it from elsewhere. "
Adding to the misery in Venezuela
While the sanctions were imposed in January, Fitzmaurice said that some shipments from Venezuela continue to arrive in recent weeks due to the condemnation of US officials and the fact that the raw material is already on Gulf Coast ships
Before the sanctions, the United States was Venezuela's first oil customer, the Venezuelan government relied on oil exports for 90% of its revenues
The years of insufficient investment from the country led to a sharp decline in Venezuela's oil production. But this situation has been exacerbated by the recent chaos and US sanctions. "Venezuela has been a problem kid for the oil market for quite some time," says Michael Tran, director of RBC Capital Markets' global energy strategy.
Saudi shipments have fallen by 37%
Closing oil supplies from Venezuela increases pressure on energy prices. US oil has grown by 40% on Christmas Eve and gasoline prices are higher.
Saudi Arabia, the king of OPEC, cut sharply oil supplies to the United States. The aim is to convince oil traders and analysts that it really reduces production. The United States has the most timely and accurate inventory data.
t They are 68% less than two years ago.
"The Saudis are specifically targeted at the United States," Fitzmauris said.
Canada and Mexico have their own problems
The bad news is that US refineries can not rely solely on American shale oil. This is because not every barrel of crude oil is created equally. While US shale oil is high-quality light, the decades-long refinery system of the Gulf is configured to work on a healthy dose of heavy, lower quality raw material.
"As for really hard things, we do not really have one," Fitzmauris says.
Normally, the United States can turn to Canada for heavy raw materials. But Canada has exhausted the pipelines used to transport crude oil to its southern neighbor, limiting production.
"Canada is exhausted," said RBC Tran.
Mexico also produces heavy raw materials. But oil production in Mexico has been steadily declining for years.
The situation has caused a strange phenomenon where heavy crude oil is traded at a flat or even a premium price.
"Why would he pay more for something of inferior quality?" "It's getting harder and harder to find these heavy raw materials," said Tran