This one‑page explainer shows how Venezuela’s heavy crude disappearing from global markets affects refinery operations, heavy‑sour crude pricing, and ultimately the cost of diesel.
Due to sanctions, naval blockades, and political instability, Venezuela’s exports have fallen sharply. Production has collapsed to under 1% of global supply, and many shipments cannot reach international buyers.
Wells in the Orinoco Belt are being shut in — a damaging, expensive‑to‑reverse process.
Venezuela produces ~800,000 barrels/day in a 102 million barrel/day world. Removing it does not cause a global oil shock.
Venezuela exports extra‑heavy, high‑sulfur crude (like Merey‑16). Only certain refineries can process it — especially in the U.S. Gulf Coast, China, and India.
When Venezuela disappears, these refineries must switch to:
This increases competition for heavy barrels and raises their price.
Heavy‑sour crude yields more:
Light crude (like WTI) produces more gasoline but less diesel.
This is why diesel often spikes even when gasoline does not.
With Venezuela offline, refiners turn to Canadian WCS. This reduces the WCS discount and raises the cost of diesel production in North America.