By Collin Eaton

The global oil market is reeling after U.S.-Israeli strikes on Iran shut the world's biggest oil-shipping artery. But tankers are ferrying more crude from an unlikely source: Venezuela.

U.S. imports of Venezuelan oil have climbed to their highest level in more than a year, just months after President Trump implemented an oil blockade that crippled the shadow fleet transporting the Latin American country's heavy crude.

More than two dozen tankers have ferried Venezuela's oil to the U.S. Gulf Coast since the early January incursion that led to the ouster of former President Nicolás Maduro. Those tankers transported more than 280,000 barrels a day to the U.S. in February, according to market intelligence firm Kpler, the most since December 2024 when Venezuela exported over 300,000 barrels a day.

The White House wants to see those numbers grow. Trump is pushing U.S. oil producers to invest $100 billion in Venezuela to jump-start the oil industry there, and his success in convincing them to do so has become all the more important.

The president hopes to keep oil prices, a key driver of inflation, tamped down in the wake of missile strikes that for weeks could hamstring shipments through a vital oil chokepoint, the Strait of Hormuz, which runs between Iran and the United Arab Emirates.

American fuel makers are snapping up the rising supplies of Venezuela's heavy, viscous oil that their refineries were designed to process. Its cheap oil has historically been a better bargain for U.S. refineries than the light, sweet oil produced by U.S. frackers.

"They're going to run more of it because it's profitable," said John Auers, managing director of Refined Fuels Analytics, part of energy consulting firm RBN Energy.

Venezuela's crude is expected to displace barrels produced in the U.S., as well as heavier oil from Canada and Mexico. That would take domestic market share from U.S. frackers, who have warned Trump that an influx of supply could weigh on oil prices, squeezing an industry that is already grappling with a glut.

Domestic drillers will have to find more buyers overseas. The U.S. exported 4.1 million barrels of oil a day to countries including the Netherlands, South Korea and India in December, the most recent data available show.

A global shortage of heavy oil has squeezed Gulf Coast refinery margins for years, prompting them to use more of the costlier U.S.-produced oil to make transportation fuels and petrochemicals.

The re-emergence of Venezuelan crude is already helping to push prices for heavy crude down. Last year, U.S. refineries bought Canada's heavy crude at an average discount of $4.27 a barrel to U.S. crude, which ended 2025 at $57.42 a barrel. In January, the discount widened to an average $8.29 a barrel, Refined Fuels Analytics data show.

The Trump administration has pushed for Venezuelan crude to be sold at higher prices than it was under previous sanctions, when most of the oil flowed to China. It was recently marketed above prices for Canadian crude, but analysts say they expect Venezuelan oil prices to fall eventually.

"The refineries had changed over the years their diet to a much lighter-oil diet because of the lack of Venezuelan heavy oil," said Francisco Monaldi, director of the Latin America Energy Program at Rice University's Baker Institute for Public Policy. "If you have tons of availability of heavy, as is currently the case, you could move back into a more heavy diet."

Venezuelan shipments to China dried up in the past two months, after peaking in 2025 at 620,000 barrels a day, according to Kpler data. Cuba was also cut off, though the U.S. recently eased its policy on oil sales to Cuba.

Some of that production has been ferried to Europe. Venezuela's crude exports to Spain came to 106,000 barrels a day in February, the highest level in a year and a half. Venezuela shipped 18,000 barrels a day to Italy, which had bought almost none last year.

Shares of large U.S. refinery operators have jumped in conjunction with the improved outlook. Valero Energy's stock is up 14% in the past month, Phillips 66 has risen 6.5% and Marathon Petroleum is up almost 13%, as of Wednesday.

Randy Hawkins, a vice president at Valero, recently told investors that the company has used as much as 240,000 barrels of Venezuelan crude a day in the past and now has even greater capacity for heavy oil at its huge Port Arthur, Texas, refinery.

For Marathon Petroleum, the largest U.S. fuel maker by refining capacity, Canadian barrels currently offer the best deal. But the company, which runs 50% heavy, sour oil across its refinery system, has "the ability to quickly pivot to Venezuelan crude" should the economics warrant it, Chief Executive Maryann Mannen said.

Mark Lashier, CEO of refinery and pipeline operator Phillips 66, said his company can process 250,000 barrels a day of Venezuelan crude and has two refineries that could quickly turn to processing more Venezuelan cargoes.

"We've got refineries designed for the long term to process that crude," Lashier said. "But it's going to take a lot of investments by the upstream folks over years, if not decades, to realize the full potential."

Venezuela pumped 3 million barrels of viscous crude a day in the 1990s, but its output has fallen to 900,000 barrels a day after years of scant investment.

The Treasury Department recently paved the way for U.S. oil companies to plow money into Venezuela. Many companies, including Chevron, the only U.S. oil company currently active in Venezuela, have signaled caution.

They have said the U.S. oil industry will need guarantees for the safety of employees, as well as changes to the country's legal and financial systems, to feel comfortable making large-scale investments there. Chevron is looking to increase production from its existing projects, rather than invest in new ones.

For now, there is plenty more crude on the way from Venezuela: The current surge in exports is being fueled by the 30 million to 50 million barrels of oil currently in storage. With a limited number of customers, it will take months to drain that slug of oil, said Denton Cinquegrana, chief oil analyst at OPIS, which, like The Wall Street Journal, is owned by News Corp's Dow Jones.

"If you can import it $10 to $15 [a barrel] under" the benchmark oil price, "you should try to do as much as you possibly can with that," Cinquegrana said.

Write to Collin Eaton at collin.eaton@wsj.com

(END) Dow Jones Newswires

March 05, 2026 09:00 ET (14:00 GMT)

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