The recent geopolitical shift in Venezuela, following the U.S.-led capture and removal of former President Nicolás Maduro in early 2026, has opened new doors for American energy companies. Chevron, the only U.S. oil major still operating in the country, is ramping up its activities amid eased sanctions and a special Treasury Department license. This development marks a significant step in redirecting Venezuelan heavy crude oil back to U.S. refineries, particularly along the Gulf Coast, where infrastructure is well-suited to process this dense, sour crude. As Chevron CEO Mike Wirth stated during the company’s fourth-quarter earnings call, production in Venezuela currently stands at about 250,000 barrels per day (bpd), with potential for a 50% increase—to around 375,000 bpd—over the next 18 to 24 months, contingent on additional U.S. government authorizations.
This growth trajectory comes as the first major shipments of Venezuelan crude arrive in the U.S. post-Maduro, signaling a revival of a supply chain that once fed over 1.3 million bpd to American refineries in the late 1990s. However, the sudden surge—Chevron alone increased exports to 220,000 bpd in January 2026 from 99,000 bpd in December—has created challenges, including pricing pressures and difficulties in absorption by refiners.
Venezuelan oil, known for its heavy and sour characteristics (API gravity around 16 degrees for benchmark Merey crude, with sulfur content of 1.5-2.7%), is ideally suited for complex Gulf Coast facilities equipped with coking units to convert it into higher-value products like gasoline, diesel, and jet fuel.
Gulf Coast Refineries Processing Venezuelan Crude
The U.S. Gulf Coast, stretching from Corpus Christi, Texas, to Pascagoula, Mississippi, hosts some of the world’s most advanced refineries designed for heavy sour crudes like those from Venezuela. These facilities, which historically relied on Venezuelan imports before sanctions disrupted flows, are now seeing renewed interest. Chevron is leading the charge, currently processing about 50,000 bpd at its 356,500 bpd Pascagoula refinery, with capacity to handle an additional 100,000 bpd across Pascagoula and its West Coast El Segundo refinery (though the latter is not Gulf-based).
This positions Chevron to potentially refine up to 150,000 bpd of Venezuelan grades internally, with excess volumes sold or stored for other buyers.
Other major players are also equipped to step in, provided economics align with competitive pricing. Phillips 66, for instance, can process around 250,000 bpd of Venezuelan crude across its 265,000 bpd Sweeny refinery in Texas and 264,000 bpd Lake Charles refinery in Louisiana.
Broader Gulf Coast capabilities include:
|
Company
|
Refinery
|
Location
|
Capacity (bpd)
|
Notes on Venezuelan Processing
|
|---|---|---|---|---|
|
Motiva
|
Port Arthur
|
Port Arthur, TX
|
640,500
|
Configured for heavy sour; potential for increased runs if volumes surge.
|
|
Marathon
|
Galveston Bay
|
Texas City, TX
|
631,000
|
High-complexity setup ideal for Venezuelan grades.
|
|
ExxonMobil
|
Beaumont
|
Beaumont, TX
|
612,000
|
Capable of heavy crude; historically processed similar imports.
|
|
ExxonMobil
|
Baytown
|
Baytown, TX
|
564,000
|
Flexible for sour crudes; could displace Canadian heavy.
|
|
Valero
|
Port Arthur
|
Port Arthur, TX
|
380,000
|
Designed for heavy sour; competitive with Venezuelan economics. reuters.com
|
These refineries could collectively absorb 300,000-400,000 bpd more Venezuelan crude, boosting coking utilization and potentially displacing Canadian or Mexican heavy imports.
What Investors Should Watch For
For investors eyeing opportunities in this evolving landscape, several factors are critical. First, Venezuelan stability and a favorable fiscal regime are prerequisites for long-term expansion. Wirth emphasized the need for confidence in the country’s hydrocarbons law reforms before committing to major investments.
U.S. government approvals will dictate production growth, with the Trump administration’s $2.8 billion crude purchase deal already redirecting flows from China to the U.S.
Oil prices and refining margins also play a role—Venezuelan crude must compete against alternatives like Canadian heavy for refinery slots.
Broader energy security benefits, such as reduced reliance on geopolitically risky sources, could bolster U.S. refining stocks. Investors should monitor export volumes, refinery utilization rates, and any infrastructure upgrades in Venezuela, which could require $185 billion and 16 years to restore production to 3 million bpd.
Chevron’s Returns to Investors Over the Last Year
In 2025, Chevron demonstrated resilience despite lower oil prices, returning a record $27 billion to shareholders through $11.8 billion in dividends and $15.2 billion in stock buybacks.
This represented a 35% increase in adjusted free cash flow year-over-year, even as revenues declined 3.6% to $187 billion and upstream profits fell from $18.6 billion in 2024 to $12.82 billion.
The company raised its dividend by 5% for 2025, marking its 38th consecutive annual increase, and maintained a 4% yield.
Share performance was mixed, with a modest 3% gain through much of 2025, but Chevron’s focus on cash returns—authorized at $10-20 billion annually through 2030—positions it as a stable dividend growth play.
Returns from Gulf Coast Refineries Processing Venezuelan Oil
Refinery operators capable of handling Venezuelan crude also delivered solid shareholder returns in 2025, buoyed by higher refining margins offsetting upstream weakness. Phillips 66, with its Venezuela-ready facilities, saw downstream profits surge 75% amid volatile crude prices, supporting dividends and buybacks.
Valero and ExxonMobil, owners of key Gulf refineries, benefited from flexible crude diets, with Valero emphasizing heavy sour processing for diesel and asphalt yields. Overall, these companies maintained cash generation in the mid-teens as a percentage of revenues, with buyback programs similar to Chevron’s, though specific 2025 figures vary: Exxon focused on $15-20 billion in annual repurchases, while Valero returned over $10 billion.
Investors in these stocks should anticipate margin boosts from cheaper Venezuelan feedstock, potentially adding 1-2% to annual returns if volumes stabilize.
As Venezuelan oil flows resume, the U.S. energy sector stands to gain from enhanced supply security and refining efficiency. However, success hinges on navigating political and market uncertainties—making this a space for vigilant, long-term investors.
Sources: theguardian.com, fool.com, nasdaq.com, VectorVest,
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