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US oil refiners gear up for comeback of Venezuelan crude

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US oil refiners gear up for comeback of Venezuelan crude

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US refiners are braced for a surge in Venezuelan crude that would make them early winners of President Donald Trump’s extraordinary plans for an energy-led regime change in Caracas.

Shares in America’s top refining groups jumped on Monday as traders bet their US Gulf Coast operations could snap up big volumes of Venezuelan heavy crude as Washington looks to ease sanctions and revive production.

Valero, the biggest US importer of Venezuelan crude, closed 9 per cent higher. Phillips 66 added 7 per cent and Marathon Petroleum 6 per cent. 

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“Our refineries in the Gulf Coast of the United States are the best in terms of refining the heavy crude,” said US secretary of state Marco Rubio on Sunday. “I think there will be tremendous demand and interest from private industry if given the space to do it.”

Trump this weekend touted the “tremendous amount of wealth” that could be generated by American oil companies returning to Venezuela’s oil sector after US forces captured President Nicolás Maduro and transported him to the US to face trial on drug-trafficking charges. 

That has sparked a burst of interest among energy investors keen to return to Venezuela — home to the biggest oil reserves in the world — decades after expropriations by Caracas led most to abandon the country. 

A flurry of executives was expected to arrive in Miami on Tuesday, where US energy secretary Chris Wright will pitch the benefits of channelling billions of dollars into reviving Venezuelan oil output, which has fallen from 3.7mn barrels a day in 1970 to less than 1mn b/d today as a result of chronic mismanagement, corruption and sanctions. 

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While any investment by US companies in rejuvenating Venezuelan oil production could take time, Gulf Coast refiners are well positioned to hoover up crude shipments as soon as sanctions are eased and more import permits are granted, something analysts say could happen quickly. 

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“Near-term, Gulf Coast refiners could be among the biggest winners of shifts that could occur here,” said Dylan White, principal analyst for North American crude markets at consultancy Wood Mackenzie. 

“The investment side of the coin in Venezuela is much more slow moving. It’s turning a very slow ship and it involves high-level decisions from a number of companies,” he said. “[But] sanctions policy changing in the US could change the economic benefits for US Gulf Coast refiners tomorrow.”

American refiners and traders import about 100,000-200,000 b/d of Venezuelan crude, down from 1.4mn b/d in 1997. Under current US sanctions, Chevron is the only American producer allowed to operate in the country and imports of Venezuelan crude are heavily restricted.

As much as 80 per cent of Venezuelan exports had been bound for China before the US imposed a naval embargo last month. Much of that could be quickly rerouted to the US if sanctions were lifted.

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“The natural proximal home for a lot of those Venezuelan heavy barrels would be the refining complex of the US Gulf Coast,” said Clayton Seigle, senior fellow at the Center for Strategic and International Studies, adding that the fact that the facilities were equipped to process Venezuelan heavy oil could explain “some of the short-term stock market reactions that we observed”.

Valero, Philips 66 and Marathon did not respond to requests for comment on their plans.

US refineries were largely set up before the shale revolution made America the world’s biggest oil producer. Almost 70 per cent of US refining capacity is designed primarily to handle the heavy grades common in Venezuela, Canada and Mexico rather than the light, sweet variety found in Texas oilfields, according to the American Fuel and Petrochemical Manufacturers.

Consultancy S&P Global Energy estimates that from 1990 to 2010, US refiners spent about $100bn on heavy crude processing capabilities, just before the fracking boom sent American production soaring.

“This finally gets some of the [return on investment] back,” said Debnil Chowdhury, Americas head of refining and marketing at S&P, of the potential for a return to significant imports of Venezuelan heavy oil.

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“We had a system that was kind of running de-optimised for the last 10-15 years. And this allows it to get a little bit closer to what it was designed for — which means slightly higher yields, higher margins.

“You get to basically use your asset more how it was designed because you’re getting the feedstock it was designed for.”

Data visualisation by Eva Xiao in New York

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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The Supreme Court on Monday intervened in New York’s redistricting process, blocking a lower court decision that would likely have flipped a Republican congressional district into a Democratic district.    
  
At issue is the midterm redrawing of New York’s 11th congressional district, including Staten Island and a small part of Brooklyn. The district is currently held by a Republican, but on Jan. 21, a state Supreme Court judge ruled that the current district dilutes the power of Black and Latino voters in violation of the state constitution.  
  
GOP Rep. Nicole Malliotakis, who represents the district, and the Republican co-chair of the state Board of Elections promptly appealed to the U.S. Supreme Court, asking the justices to block the redrawing as an unconstitutional “racial gerrymander.” New York’s congressional election cycle was set to officially begin Feb. 24, the opening day for candidates to seek placement on the ballot.  
  
As in this year’s prior mid-decade redistricting fights — in Texas and California — the Trump administration backed the Republicans.   
 
Voters and the State of New York contended it’s too soon for the Supreme Court to wade into this dispute. New York’s highest state court has not issued a final judgment, so the voters asserted that if the Supreme Court grants relief now “future stay applicants will see little purpose in waiting for state court rulings before coming to this Court” and “be rewarded for such gamesmanship.” The state argues this is an issue for “New York courts, not federal courts” to resolve, and there is sufficient time for the dispute to be resolved on the merits. 
  
The court majority explained the decision to intervene in 101 words, which the three dissenting liberal justices  summarized as “Rules for thee, but not for me.” 
 
The unsigned majority order does not explain the Court’s rationale. It says only how long the stay will last, until the case moves through the New York State appeals courts. If, however, the losing party petitions and the court agrees to hear the challenge, the stay extends until the final opinion is announced. 
 
Dissenting from the decision were Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. Writing for the three, Sotomayor  said that  if nonfinal decisions of a state trial court can be brought to highest court, “then every decision from any court is now fair game.” More immediately, she noted, “By granting these applications, the Court thrusts itself into the middle of every election-law dispute around the country, even as many States redraw their congressional maps ahead of the 2026 election.” 

Monday’s Supreme Court action deviates from the court’s hands-off pattern in these mid-term redistricting fights this year. In two previous cases — from Texas and California — the court refused to intervene, allowing newly drawn maps to stay in effect.  
  
Requests for Supreme Court intervention on redistricting issues has been a recurring theme this term, a trend that is likely to grow.  Earlier last month  the high court allowed California to use a voter-approved, Democratic-friendly map.  California’s redistricting came in response to a GOP-friendly redistricting plan in Texas that the Supreme Court also permitted to move forward. These redistricting efforts are expected to offset one another.     
   
But the high court itself has yet to rule on a challenge to Louisiana’s voting map, which was drawn by the state legislature after the decennial census in order to create a second majority-Black district.  Since the drawing of that second majority-black district, the state has backed away from that map, hoping to return to a plan that provides for only one majority-minority district.    
     
The Supreme Court’s consideration of the Louisiana case has stretched across two terms. The justices failed to resolve the case last term and chose to order a second round of arguments this term adding a new question: Does the state’s intentional creation of a second majority-minority district violate the constitution’s Fourteenth and Fifteenth Amendments’ guarantee of the right to vote and the authority of Congress to enforce that mandate?    
Following the addition of the new question, the state of Louisiana flipped positions to oppose the map it had just drawn and defended in court. Whether the Supreme Court follows suit remains to be seen. But the tone of the October argument suggested that the court’s conservative supermajority is likely to continue undercutting the 1965 Voting Rights Act.   

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Map: Earthquake Shakes Central California

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Map: Earthquake Shakes Central California

Note: Map shows the area with a shake intensity of 3 or greater, which U.S.G.S. defines as “weak,” though the earthquake may be felt outside the areas shown.  All times on the map are Pacific time. The New York Times

A minor earthquake with a preliminary magnitude of 3.5 struck in Central California on Monday, according to the United States Geological Survey.

The temblor happened at 7:17 a.m. Pacific time about 6 miles northwest of Pinnacles, Calif., data from the agency shows.

As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.

Source: United States Geological Survey | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Pacific time. Shake data is as of Monday, March 2 at 10:20 a.m. Eastern. Aftershocks data is as of Monday, March 2 at 11:18 a.m. Eastern.

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US says Kuwait accidentally shot down 3 American jets

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US says Kuwait accidentally shot down 3 American jets

The U.S. and Israel have been conducting strikes against targets in Iran since Saturday morning, with the aim of toppling Tehran’s clerical regime. Iran has fired back, with retaliatory assaults featuring missiles and drones targeting several Gulf countries and American bases in the Middle East.

“All six aircrew ejected safely, have been safely recovered, and are in stable condition. Kuwait has acknowledged this incident, and we are grateful for the efforts of the Kuwaiti defense forces and their support in this ongoing operation,” Central Command said.

“The cause of the incident is under investigation. Additional information will be released as it becomes available,” it added.

In a separate statement later Monday, Central Command said that American forces had been killed during combat since the strikes began.

“As of 7:30 am ET, March 2, four U.S. service members have been killed in action. The fourth service member, who was seriously wounded during Iran’s initial attacks, eventually succumbed to their injuries,” it said.

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Major combat operations continue and our response effort is ongoing. The identities of the fallen are being withheld until 24 hours after next of kin notification,” Central Command added.

This story has been updated.

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