Why access to Venezuela’s ‘heavy’ oil is ‘tremendous’ news for US refiners

EXPLAINERVenezuela’s oil type is particularly lucrative for US refineries, according to analysts.The Panama-flagged oil tanker Nave Neutrino waits to load heavy crude for export near the port of Bajo Grande in Maracaibo, Venezuela, on September 16, 2025 [Isaac Urrutia/Reuters]Published On 16 Jan 2026The United States’ bid to control Venezuela’s oil sector after abducting Venezuelan President Nicolas Maduro has shone a spotlight on the type of crude held by the Latin American country.Crude oil, which is produced by about 100 countries, comes in hundreds of varieties that differ by viscosity and sulfur content.Recommended Stories list of 4 itemslist 1 of 4Trump suspends immigrant visas for 75 countries: Who’s affected?list 2 of 4Bangladesh’s Muhammad Yunus Eralist 3 of 4Russia unlikely to risk ‘reputation failure’ by intervening in Iran unrestlist 4 of 4Japan, Philippines sign new defence pacts amid surging China tensionsend of listWhile all grades of crude oil are valuable, their differing properties make certain grades more sought after in some markets than others.What is the difference between ‘heavy’ and ‘light’ grades of oil?Crude oils are rated as “heavy” or “light” based on their viscosities, or “gravities”.Crude is also classified by sulfur content, with high-sulfur grades called “sour” and lower-sulfur varieties referred to as “sweet”.Heavy, sour grades are more difficult and costly to refine into petroleum products such as gasoline, diesel, kerosene and jet fuel.Generally speaking, lighter and sweeter crude commands higher prices.Some countries and regions primarily produce certain grades.Canada mainly produces heavy, sour crude, for example, while African varieties tend to be lighter and sweeter.Popular light, sweet varieties include Saudi Arabia’s Arabian Super Light, Iran’s South Pars Condensate, Malaysia’s Tapis Blend, and Australia’s Cossack.Among the most traded heavy, sour varieties are China’s Shengli, the United Kingdom’s Kraken, Iraq’s Basra Heavy, and Iran’s Soroosh.What type of oil does Venezuela have?Venezuela has the world’s largest proven oil reserves, at an estimated 303 billion barrels.Most of those reserves are made up of heavy, sour crude located in the Orinoco Oil Belt in the centre of the country.The basin’s oil is especially dense and vicious, with a tar-like consistency that necessitates specialist methods such as steam injection and diluents for extraction.Industry analysts say tapping the basin’s true potential will require huge investment due to the degraded state of the sector’s infrastructure and knowledge base, following late leader Hugo Chavez’s nationalisation of the industry and years of US sanctions that prevented Venezuela from accessing foreign capital and modern technology.The Latin American country’s output was estimated at about 860,000 barrels per day (bpd) in November, less than 1 percent of the world’s total, a steep decline from its 1970s peak of about 3.5 million bpd.Rystad Energy, a consultancy based in Oslo, Norway, has estimated that about $110bn in capital investment would be needed to return to the country’s late 2000s output of about 2 million bpd.US President Donald Trump, whose decision to kidnap Maduro has been widely condemned as a violation of international law, has said US oil companies are prepared to invest billions of dollars to revive production.Why is Venezuela’s heavy crude particularly attractive for the US?Some industry analysts have expressed scepticism that US oil companies will be drawn to Venezuela – at least not without significant incentives and guarantees.They point to the post-Maduro leadership uncertainty, Chavez’s past expropriation of company assets, and the excess supply of oil in the global market as reasons why firms may be hesitant to invest.ExxonMobil and ConocoPhillips, two of the biggest US oil firms, pulled out of the country in 2007 following Chavez’s seizure of their facilities, and the two companies were later awarded large payouts in international arbitration.At a meeting with Trump at the White House on Friday, ExxonMobil Chief Executive Officer Darren Woods described Venezuela as “uninvestable” in its current state and said “significant changes” would need to occur in the country to justify returning.As the only major US oil producer in the country at present, Chevron, which operates under special exemption from Washington’s sanctions, is widely viewed as best positioned to profit on Trump’s plans.While there are differing views on the business case for the major oil companies in Venezuela, analysts are in agreement that one group in particular stands to gain: US refineries.While the US currently pumps more crude than any other country due to an explosion in drilling for lighter shale oil, most of the country’s refineries were built to process heavier grades.Nearly 70 percent of US refining capacity is designed for heavier crude, according to the American Fuel and Petrochemical Manufacturers, a relic of heavy investment made before the more recent boom in shale drilling.“You need what is referred to as a ‘complex’ refinery with deep conversion capacities. The Gulf Coast has multiple refineries like that,” Denton Cinquegrana, chief oil analyst at Oil Price Information Service, told Al Jazeera.“The coker units that are key were built to take advantage of heavy crude not just from Venezuela, but also places like Mexico and other South American producers.”Shon Hiatt, director of the Zage Business of Energy Initiative at the University of Southern California, said US refineries would benefit “tremendously” from a boost in exports of Venezuelan crude.“Many of the US refineries along the coast – Texas and Louisiana – were built and designed to process Venezuela crude,” Hiatt told Al Jazeera.“Venezuela has a history of exporting its oil to the US due to the fact that US oil companies were the first to go in, discover, pump, process, and export Venezuelan petroleum. Hence, refineries along the coast were built to handle this type of petroleum.”While heavy Canadian crude has displaced imports from Venezuela over the years due to sanctions, that could change if Trump has his way, Hiatt said.“If the Venezuelan heavy crude exports increase, it will displace the Canadian heavy crude as Venezuelan crude typically is sold at a lower price to these refineries,” he added.