Refiners including Phillips 66, Chevron, Reliance, Repsol and Eni are signing direct crude supply deals with Venezuela’s PDVSA, squeezing out trading houses Vitol and Trafigura. The shift lets Venezuela capture higher prices as its exports push past 1.2 million barrels per day.
Refiners are buying Venezuelan crude straight from state producer PDVSA, cutting out the commodity trading houses that dominated the market for the past six months, according to Reuters. Phillips 66 and India’s Reliance Industries have already signed direct supply agreements, with Valero and Thailand’s Tipco expected to follow.
How Vitol and Trafigura lost their edge
Vitol and Trafigura became dominant in Venezuelan crude oil marketing thanks to exclusive U.S. government licenses, existing logistics and long ties to PDVSA. After political shifts in Venezuela in January, the U.S. Treasury issued long-term licenses to the two traders until June 2027, effectively handing them a temporary monopoly. The pair collectively moved more than 100 million barrels over that period while rivals stayed locked out.
Their logistics reinforced the lead. When the war in Iran disrupted Middle Eastern supply, the two houses diverted heavy grades like Merey 16 to Asian refining hubs in India, South Korea and Malaysia at narrower discounts.
Refiners move in directly
But that monopoly is fading as PDVSA restores its pre-2019 model of selling straight to refiners and joint-venture partners. After a seven-year gap, Phillips 66 resumed buying spot cargoes and was allocated three cargoes of Merey 16 in July, a heavy sour grade suited to its U.S. Gulf Coast plants. By skipping intermediaries, PDVSA raises its realized price and reshapes Gulf Coast refining economics.
Chevron has expanded too, lifting an average of 293,000 bpd in Q2, up from 223,000 bpd earlier in the year. The company finalized an asset swap that raised its stake in the Petroindependencia joint venture to 49% and granted new drilling areas in the Orinoco Oil Belt. Analysts estimate the ramp-up could add up to $700 million a year to Chevron’s operating cash flow, according to Bloomberg.
Reliance began direct purchases too, loading a 2-million-barrel cargo in April straight from PDVSA. European majors Repsol and Eni have expanded direct liftings to feed their refineries, partly to offset billions in receivables from supplying Venezuela’s domestic market.
The recovery has limits
Growth still faces real constraints, because Venezuela is short of working oilfield services and drilling equipment. Rystad Energy estimates a 17% production increase is technically possible by 2028, though operational limits set the actual pace. Total oil and fuel exports climbed past 1.2 million bpd in mid-2026, up from an average of 847,000 bpd in 2025, with the country now eyeing 1.37 million bpd by year-end.
Source: Oilprice.com
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