As Venezuela spirals, US oil confronts a $10 billion threat

The tanker Paramount Helsinki docked in Pascagoula, Miss., last week bearing the lifeblood of Chevron Corp.’s refinery there: 532,000 barrels of thick Venezuelan oil.

Its arrival on July 23, as Venezuela’s democracy slid into what may be its final crisis, underscores the uneasy partnership that the American oil industry has entered with a nation some fear is marching toward dictatorship.

From New Jersey down to Texas, oil companies have come to depend on crude-soaked Venezuela to feed their massive refineries. Last year alone, more than 270 million barrels worth about $10 billion reached American shores -- enough to produce about 5 billion gallons of gasoline.

Now that vital flow could be stanched if, as industry leaders fear, President Donald Trump’s administration embargoes imports to pressure his Venezuelan counterpart, Nicolas Maduro. The socialist autocrat’s allies on Thursday will begin rewriting the constitution, pushing aside Venezuela’s democratic institutions. The prospect of a U.S. response that cuts off crude has been particularly unsettling for the likes of Chevron, Phillips 66 and Valero Energy Corp. which have spent billions calibrating their plants to handle Venezuela’s sludgy-but-abundant oil.

“The reason why Trump has not hit back immediately is because there are lots of constituencies," foremost among them U.S. refiners and anyone who drives, said Sandy Fielden, commodities research director at Morningstar Inc. in Chicago. “A lot of different parties will be impacted."

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