Refiners Challenge Global Traders for Share of Venezuela's Oil Exports

Refiners are increasingly taking a larger share of Venezuela's oil exports as they sign direct contracts with state-run PDVSA, challenging global traders who inked earlier deals with the government.

The U.S. and international refiners, including Phillips 66 and Reliance Industries, have begun buying crude directly from PDVSA in recent months, a move that could secure better prices for the company through longer sale deals.

This shift is part of PDVSA's effort to return to its pre-2019 business model, which prioritized supply contracts with joint-venture partners and refineries over intermediaries. The state-owned oil company aims to diversify destinations and prices while securing long-term pacts for heavy grades that can be difficult to market.

In May, Phillips 66 resumed buying spot cargoes from PDVSA after a seven-year pause, and in July, the company was allocated three cargoes of Merey 16 heavy crude. Reliance Industries also began direct purchases from PDVSA in May, with those barrels complementing existing volumes bought from Vitol, Trafigura, and Chevron.