Refiners Squeeze Out Traders to Claim Larger Share of Venezuelan Oil

Global trading firms are facing growing competition in Venezuela as international oil producers and refiners secure direct supply contracts with state-run PDVSA. This shift challenges the dominant market position currently held by major traders like Vitol and Trafigura, which have controlled the bulk of Venezuelan oil exports this year through Washington-approved agreements signed in January.

PDVSA is gradually returning to its pre-2019 business model, prioritizing direct relationships with refineries and joint-venture partners over third-party intermediaries. Industry sources indicate this strategy is designed to help the state company secure better pricing and establish stable, long-term commitments for its heavy crude grades.

Several major refiners have already resumed direct purchases:
* **Phillips 66** began buying spot cargoes in May after a seven-year hiatus, securing three shipments of Merey 16 heavy crude in July.
* **Reliance Industries** of India also initiated direct purchases in May to supplement the volumes it receives from Chevron, Vitol, and Trafigura.
* **Valero Energy** and Thailand’s **Tipco Asphalt** are expected to begin direct purchases in the near future, though they have not yet been assigned loading windows.

Additionally, PDVSA’s joint-venture partners are increasing their off-take as Venezuelan exports rise. Driven by production expansions, Venezuela’s oil and fuel exports have climbed to over 1.2 million barrels per day (bpd), up from an average of 847,000 bpd in 2025.

* **Chevron** increased its exports of Venezuelan crude to 293,000 bpd in the second quarter, up from 223,000 bpd in the first quarter.
* Spain’s **Repsol** began direct loadings of Merey crude in July, moving away from intermediary traders.
* Italy’s **Eni** was allocated a cargo bound for Europe, with both European firms using the oil to offset outstanding debts owed by Venezuela.

In response to the shifting landscape, trading houses are establishing a physical presence in the country to protect and expand their operations. Trafigura has set up a small team in Caracas, while Vitol is actively planning to hire staff locally. With Venezuela targeting a production increase to 1.37 million bpd by the end of the year, the competition for the country’s heavy crude is expected to intensify.