Tuesday, 02 January 2024 12:17 GMT

OPEC Grip To Be Tested By US Refiners Over Venezuela Oil


(MENAFN- Investor Ideas) Investorideas (Investorideas Newswire) a go-to platform for big investing ideas, including energy stocks issues market commentary from deVere Group.

OPEC's grip on global oil markets could be facing its most serious test in years as US refiners move to seize control of Venezuelan crude, asserts the CEO of global financial advisory giant deVere Group.

Nigel Green's analysis comes as Washington ramps up asserting authority over Venezuela's oil sector, and as American refiners are seen to be positioning themselves to become the new power brokers in a market long dominated by producer alliances.

Oil traders and US refiners are scrambling to secure Venezuelan supply after reports that Chevron is seeking a wider operating licence and Citgo could resume purchases of crude.

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If the Trump administration expands permissions, the impact will be immediate and structural. US Gulf Coast refineries are among the few in the world designed to process Venezuela's heavy sour crude efficiently.

Years of sanctions have kept those barrels sidelined, forcing refiners to rely on alternative heavy grades that are now increasingly scarce.

Sanctions on Iran and Russia have tightened the market further, leaving refiners competing for a shrinking pool of suitable feedstock.

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For decades, OPEC (Organization of the Petroleum Exporting Countries) has shaped oil markets through coordinated production decisions.

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The country holds the world's largest proven crude reserves, yet its output remains constrained by sanctions, infrastructure decay, and diplomatic isolation.

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This is why Chinese oil firms are seeking guidance from Beijing. Their concern is not theoretical. It reflects a recognition that access to Venezuelan energy is becoming a political contest rather than a market transaction.

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For markets, this marks the return of energy power politics in its most modern form.

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