Refiners bypass traders to buy Venezuelan crude directly
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Global refiners including Phillips 66 and Reliance Industries have signed direct supply contracts with Venezuela's PDVSA, bypassing commodity traders such as Trafigura and Vitol. The shift erodes the traders' temporary monopoly on Venezuelan crude marketing, which had allowed them to move over 100 million barrels in six months. PDVSA is restoring its pre-2019 direct-sales model to capture higher realized prices.
Direct Supply Deals
Phillips 66 and India's Reliance Industries have signed direct supply agreements with PDVSA, with Valero and Thailand's Tipco expected to follow. In July, Phillips 66 was directly allocated three cargoes of Merey 16 heavy sour crude for its U.S. Gulf Coast refineries. The deals bypass intermediaries, allowing PDVSA to raise its realized price by avoiding reseller premiums.
Trader Monopoly Eroded
Vitol and Trafigura had held a temporary monopoly on Venezuelan crude marketing since January, backed by exclusive U.S. Treasury licenses valid through June 2027. The pair moved over 100 million barrels in six months, leveraging their fleet capacity and floating storage in Malaysia. However, PDVSA is now actively restoring its pre-2019 direct-sales model, cutting out middlemen.
Chevron's Expanding Exports
Chevron has significantly increased its Venezuelan oil exports, averaging 293,000 bpd in Q2 2026, up from 223,000 bpd earlier in the year. The ramp-up coincides with increased shipments to the U.S. Chevron's joint-venture status with PDVSA gives it direct access, further squeezing trader margins.
What's Next
Valero and Tipco are expected to finalize direct supply agreements with PDVSA in the coming months. It remains unclear whether Vitol and Trafigura can retain their market share as PDVSA prioritizes direct deals and U.S. license terms may face renegotiation.
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Refiners bypass traders to buy Venezuelan crude directly
