US refineries taking in half of Venezuelan oil output

US Gulf Coast Refineries Absorb Half of Venezuelan Output

The resumption of heavy crude shipments marks a significant operational shift for American processing plants built specifically for heavy, sour oil grades.

Decades of underinvestment and sanctions had previously throttled Venezuelan production down to approximately 1 percent of global supply. At the close of 2025, national output hovered around 1 million barrels per day, with only about 135,000 barrels per day reaching American shores. To support the current production ramp-up, Washington is also shipping more than 100,000 barrels per day of naphtha to Venezuela to serve as a diluent for heavier crude grades. Haustveit described the arrangement as a beautiful energy partnership that creates real economic value on both sides of the trade.

PDVSA Targets Higher Output Amid Unresolved Financial Oversight

State oil company PDVSA officials speaking at the same Houston event outlined aggressive targets for the near term. Jovanny Martinez, a vice president at PDVSA, stated that national crude output would reach 1.245 million barrels per day by the end of August, accompanied by a 19.7 percent surge in exports over the year.

While production figures tick upward, the destination and transparency of oil revenues remain a subject of intense scrutiny. The Financial Times reported in July that Washington has collected more than $13bn in revenue from Venezuelan oil sales this year, a figure President Donald Trump claimed was even higher. However, the administration has provided little public accounting regarding how those funds are deployed. Independent think tanks, including the Council on Foreign Relations, have criticized the lack of public disclosure regarding oil, gold, and mineral revenues managed under US oversight, warning that excluding local political opposition from transition talks risks entrenching a corrupt successor regime.

Geopolitical Pressures Threaten China’s Oil Supply Chains

The redirection of Venezuelan barrels toward American markets is simultaneously reverberating across global energy corridors, creating distinct pressures for Chinese refiners.

Independent refiners in eastern China’s Shandong province—often called teapot refineries—rely heavily on these discounted feedstocks to remain competitive. Data compiled by Kpler indicates that while Venezuelan shipments to China have dwindled following the US intervention, about 50 million barrels of Iranian crude are currently sitting offshore China and Malaysia to provide a temporary supply buffer. Tom Reed, a China crude analyst at Argus Media, noted that Shandong independent refineries process around 2.5 million barrels per day of crude, making alternative sourcing difficult if existing discount channels experience sustained interruptions.

Upstream Stakes and Chevron’s Dominant Footprint

Within Venezuela’s domestic oilfields, foreign operators navigate a complex landscape of joint ventures and shifting equity stakes. Research published by the Center on Global Energy Policy at Columbia University highlights that US-based Chevron maintains the largest foreign production footprint in the country, representing more than 25 percent of Venezuela’s total output of nearly 1 million barrels per day.

In contrast, Chinese national oil companies account for roughly 10 percent of production. While state-backed Chinese firms maintain several projects in the Orinoco belt—most notably the Sinovensa heavy oil joint venture producing around 100,000 barrels per day—upstream ties are evolving. In February 2025, Sinopec agreed to sell its shares in a conventional crude joint venture to US-based Amos Global Energy Management, pending final approvals from the US Treasury’s Office of Foreign Assets Control and the Venezuelan government.