Venezuela Crude and its Impact on Sulphur Production

Lots of discussion around Venezuela crude moving to the US and its impact on sulphur production! 

It will largely come down to how much Venezuelan crude will be imported and replacing other barrels, therefore dictating the overall crude slate. Back in 2019 when US sanctions on Venezuela were put in place, a notable decline in US sulphur production was seen due to less heavy crude utilization, particularly in the US Gulf Coast. This was the primary driver for US sulphur production sliding by close to 900,000t in 2019 compared with 2018, bringing US production to the lowest level since 1997.

This was followed by the impacts of the Covid-19 pandemic in 2020 which saw US sulphur production drop a further 800,000t compared with 2019. The 2020 volume was the lowest level of US sulphur production since 1995 with a cumulative supply loss of 1.7m t in the two-year period.

Recent comments by the US administration indicates the US will begin selling Venezuela oil to the US immediately with an initial shipment of 30-50m bbls, which will continue indefinitely. These oil exports were previously largely sent to China. 

The uptake of this crude in the US and how much it offsets refiner’s other crude sources will dictate the sulphur impact. There is also a question of timing in terms of how long the shift will take.

We note US Gulf Coast (PADD 3) refinery utilization rates were at seasonal highs in December 2025, but refinery maintenance in 1Q is expected to constrain some output, which could offset some of the Venezuela crude impact.

There have been some questions on the impact of demand for Canadian crude, also mainly heavy in nature, if Venezuela crude becomes a more regular part of the crude supply chain. While we do expect this could reduce Canadian crude moving to the US Gulf Coast, we still expect stable demand in the Midwest (PADD 2) which should continue to support sulphur production there.

Finally, we note that while historically Venezuela exported sulphur produced there from refining and upgrading, this activity ceased in early 2018 with facilities no longer in operation. We do not expect to see a resurgence in this activity, just a focus on moving crude out of Venezuela.