U.S. President Donald Trump has invited heads of commodity trading firms, Vitol and Trafigura, to the White House for talks on Friday regarding the marketing of Venezuelan oil, Reuters has reported.
Whereas the Trump administration has tapped U.S. oil majors to play a leading role in extracting and selling crude from Venezuela, the giant European firms are some of the largest oil traders in the world, and undoubtedly have the requisite expertise to market oil from Venezuela.
Vitol delivered an average of 7.2 million barrels per day (bpd) of crude oil and products in 2024, while Trafigura handled approximately 4.3 million barrels of oil equivalent per day, representing more than 10% of global daily consumption.
Both firms have expanded their operations and diversified their portfolios, investing in infrastructure like refineries and storage facilities, as well as moving into metals and renewable energy as market dynamics evolve. They are also key buyers of fuels from major new facilities like the Dangote oil refinery in Nigeria.
Unlike their European peers, such as Shell (NYSE:SHEL) and BP Plc. (NYSE:BP), U.S. oil majors such as ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) do not have large trading desks, preferring to focus more on their core business of exploration and production (E&P).
Despite holding the world’s largest proven oil reserves at more than 300 billion barrels, Venezuela produces relatively modest volumes of crude, averaging around 900,000 to 1 million barrels per day (bpd), a significant drop from its peak of over 3 million bpd, thanks to sanctions by Western nations coupled with years of underinvestment, mismanagement, and systemic corruption.
The Orinoco Belt, located in the eastern part of Venezuela, contains the majority of the country’s crude reserves. The oil is extra-heavy and sour (high sulfur content), with a low API gravity. This makes it more challenging and expensive to extract and refine compared to lighter, conventional crudes. It also requires blending with diluents (like naphtha) for transport and processing in specialized upgraders or refineries.
By Alex Kimani for Oilprice.com
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