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Market Chatter: US Venezuelan Crude Imports Hit Highest Since 2012

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US refiners are importing the most Venezuelan crude in almost a decade, with July imports expected to average about 804,000 barrels per day, the highest since 2017, after the US lifted sanctions earlier this year, Bloomberg reported on Thursday.

Refiners along the US Gulf Coast are increasing purchases of Venezuelan crude as a hedge against potential Canadian oil sands supply disruptions, as hot and dry weather raises the risk of wildfires. Canadian heavy crude is similar in quality to Venezuelan grades.

US refiners are benefiting from some of the strongest profit margins in years, supported by relatively low fuel inventories and geopolitical supply disruptions. Last week, the US Gulf Coast 3-2-1 crack spread reached its highest level since at least 2012.

Growing US demand has also strengthened the Gulf Coast market for Venezuelan crude. Discounts for the heavy grade have narrowed to about $10 per barrel below ICE Brent from roughly $15/bbl in May, offsetting weaker Chinese demand, which has fallen significantly this year.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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