Mexico, Iraq Likely to Fill Venezuelan Oil Gap to U.S.
CBJ — A lack of pipeline capacity appears to be holding back Canada’s potential to sell more of its oil to the United States.
The lack of infrastructure to transfer the commodity means Canada will not be able to boost shipments to take advantage of U.S. sanctions against Venezuela’s national oil company.
The sanctions announced against PDVSA are designed to interrupt the flow of oil money to the government of President Nicolas Maduro, putting pressure on him to step aside and allow opposition leader Juan Guaido to fill in as interim president.
With Canada seemingly out of the picture it means Mexico and Iraq are instead most likely to benefit in the race to replace Venezuela heavy crude imported for processing at refineries on the U.S. Gulf Coast.
It also remains uncertain how much Venezuelan oil will be diverted because, under the sanctions, U.S. refiners will still be able to buy oil from PDVSA but the proceeds from the transactions will be set aside for the use of a new government in Venezuela.