Live
Audio Only
U.S. oil and petrochemicals makers are warning President Donald Trump that proposed oil sanctions against Venezuela could hurt domestic companies and consumers.
In a letter sent to Trump and published in La Tabla.com, the head of the American Fuel and Petrochemical Manufacturers, Chet Thompson, wrote that the measures would not help to solve the problems in the South American nation.
Venezuela now sells more than 700,000 barrels of oil a day to the U.S. out of a total production of roughly two million barrels a day, or just over 2 percent of world production.
The document indicates that some 20 U.S. refineries are supplied with heavy Venezuelan crude, for which they have made substantial processing adjustments.
It says there are practically no other sources of supply for this type of oil.
So a suspension of purchases to Venezuela, would destabilize the world market for hydrocarbons.
The manufacturers estimate that the search for additional quotas of heavy crude would be extremely complicated and could increase costs, resulting in higher prices for consumers.
The two countries’ economies are tightly bound by the oil that Venezuela sells to the United States: It accounts for roughly 10 percent of the oil imported by the U.S.
RELATED:
US Announces New Sanctions on Venezuela in Interventionist Move
In Washington, the U.S. Vice President Mike Pence has reiterated the White House's threat to impose "strong and swift economic actions" if Sunday's National Constituent Assembly vote goes ahead.
While the Republican U.S. Senator Marco Rubio noted that the Trump administration had announced sanctions this week, and added, "You can expect more."
Trump targeted 13 senior Venezuelan officials on Wednesday, including the Vice President of the state-owned Petroleos de Venezuela SA, Simon Zerpa.
Other oil industry experts have expressed also concerns about the possible consequences of more sanctions.
Patrick DeHaan, a senior petroleum analyst for price-tracker GasBuddy, and Phil Flynn, a senior market analyst for the PRICE Futures Group in Chicago, both told UPI this week a potential ban on Venezuelan oil might have unintended consequences.
"A cut of Venezuelan exports would add about 15 to 25 cents a gallon to U.S. gasoline prices," Flynn said.
Platts added that, for the refiners concentrated on the U.S. Gulf Coast, Venezuela is the largest source of crude oil, ahead of Saudi Arabia, noting those reviewing sanctions in the Trump administration recognize the potential for repercussions.
The administration source told Platts that "many within the Trump administration view sanctions on Venezuelan crude imports as having a more devastating effect on the U.S. refining sector than on Venezuela's economy."
Newsletter
