GRAPHIC-U.S. sanctions against Venezuela would divert crude and leave refiners short

(Add details on recent shipments to Venezuela)

By Devika Krishna Kumar and Collin Eaton

Jan. 23 (Reuters) – Potential US sanctions on Venezuelan crude oil exports would cut off the Gulf Coast refiner nation that is one of its biggest customers, probably forcing it to send more oil. in China, India or other Asian countries, traders said on Wednesday.

US refineries relying on Venezuelan heavy crude would find it even more difficult to secure supplies, as Canadian and Mexican crude is often not as expensive and availability is limited.

The United States plans to take steps to paralyze Venezuelan oil deliveries, which account for nearly all of the country's exports, in response to President Nicolas Maduro's reelection, which was widely regarded as a sham.

Washington has recognized opposition leader Juan Guaido as president of Venezuela as protests against Maduro have erupted across the country. He is also considering sanctions on oil deliveries, an initiative he has so far resisted, energy sources told Reuters on Wednesday.

Venezuela has exported an average of about 500,000 barrels of oil a day to the United States in 2018, according to data from the US Department of Energy. These shipments fell in November to about 358,000 barrels a day, according to a report from the consulting firm Gas Energy Latin America, based in Caracas, consulted by Reuters.

The share of its exports to the United States has declined in recent years, with more shipments going to Russia and China. [GRAPHIC: Venezuelan crude exports to the United States: tmsnrt.rs/2S4YIXB ]

These deliveries are largely made through structures for the repayment of oil for debt, the state-owned petroleum company Petróleos de Venezuela, SA, known as PDVSA, has reached a trough of nearly 70 years in the context from an economic crisis on a national scale. Venezuela's production has been cut in half since 2016 to less than 1.2 million bpd, according to figures from secondary sources of OPEC.

According to a Barclays research note released last week, shipments to the United States account for about 75 percent of Venezuela's revenue.

As a result of the sanctions, the country could seek new agreements with Turkey, India or other Asian countries, said a Venezuelan crude trader. The report by Gas Energy indicates that India is the second largest importer of Venezuelan crude in November.

"It will be expensive in Venezuela, but it will eventually be able to sell this oil at a price lower than that of Asia.There will be a period in the middle in which they will have difficulty selling these barrels," said Francisco Monaldi. , a research fellow on energy policy in Latin America at the Baker Institute for Public Policy at Rice University in Houston.

[GRAPHIC: Top U.S. importers of Venezuelan crude: tmsnrt.rs/2RYGk2E ]

Although the United States produces nearly 12 million barrels of oil a day, complex refineries on the Gulf Coast need heavier crude grades to produce diesel and other high-margin products, and can not just produce light crude.

Prices in the heavier US categories, such as Mars Sour WTC-MRS, an average US offshore crude and the Louisiana Sweet WTC-HLS crude rose as buyers scrambled to find an offer. Mars, Refinitiv Eikon reported, announced Wednesday that US crude prices were $ 6.90 higher than US crude, a record five years ago, as bidders entered the market to secure supplies throughout the second half of the year. quarter, traders announced.

"It would make a tight market even tighter. If that happened, refiners who were already struggling to find supplies would probably have a headwind, "said Bob McNally, president of Rapidan Energy Group, an energy consulting firm based in Bethesda, Maryland.

[GRAPHIC: Venezuelan crude exports to U.S. refiners: tmsnrt.rs/2S42EI5. ]

Traders said the United States may need to sell oil from the US strategic oil reserve to cover supply disruptions, as additional shipments are secured via Canada or Mexico .

The sanctions could also include US exports of petroleum products to Venezuela, used to mix with Venezuelan heavy crude.