Venezuelan crude fills the feedstock gap left by Middle Eastern disruption

The Strait of Hormuz closure severed a critical supply line for US Gulf Coast refineries — not just of crude oil, but of the heavy residual material their specialist processing units need to maximise diesel output. Venezuelan crude has stepped in to fill both roles, and is likely to remain strategically important even after the Strait reopens.

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Key Takeaways

US crude imports from Venezuela have surged to their highest level since 2017, with Venezuela now the second-largest crude supplier to the US after Canada — accounting for 10% of total imports, up from just 2% a year ago.
Venezuelan crude produces more of the heavy residual material that large, complex US Gulf Coast refineries need to run their specialist diesel-conversion units at full capacity.
The economics favour Venezuelan crude over comparable alternatives: Venezuela's Merey grade is priced roughly $4 per barrel below similar Canadian crude, while delivering equivalent or better diesel output for refineries equipped to process it.
Middle Eastern supply will not quickly return even after the Strait of Hormuz reopens. Low regional inventories, production ramp-up times, and high summer domestic energy demand in the Gulf will limit exports throughout the third quarter of 2026.

US crude oil imports from Venezuela have risen sharply in recent months and are expected to reach a new high in June, returning to levels last seen in 2017. According to the EIA, Venezuela surpassed Saudi Arabia and Mexico in May to become the second-largest crude supplier to the US after Canada. Venezuelan imports now account for 10% of total US crude imports, compared with 2% at the same time last year, while Canadian volumes have increased from 59% to 65%.

US crude imports by countries of origin (kbd)

Source: EIA

The rise in Venezuelan and Canadian crude imports is partly a structural response to the Strait of Hormuz closure in April, which cut off flows of both crude and heavy fuel oil from the Middle East to the US. It also reflects declining volumes from Mexico and Saudi Arabia, and the need for US refineries to maximise production of diesel and jet fuel as domestic inventories remain low.

After completing the spring maintenance season in late May, US refinery utilisation rates climbed above 95% in early June and are expected to stay elevated throughout the summer driving season.