Saudi Arabia’s ownership of the largest refinery in the U.S. could prove a competitive advantage in coping with Trump’s sanctions on oil from Venezuela, according to industry participants.
The Motiva refinery in Port Arthur, Texas, can refine more barrels of crude oil per day than some countries, but, like most of its rivals on the Gulf Coast, it is dependent on the heavier crude oil that comes from Venezuela.
Yet, unlike most other Gulf Coast refiners, who are struggling with the new U.S. sanctions, the Saudi-owned refinery has a wild card to play — it’s owned by the largest oil company in the world, Saudi Aramco.
“They’re a little bit insulated, because they can just ship their own oil, which they do all the time, anyway, from Saudi Arabia,” said an industry lobbyist privy to White House meetings on Venezuela. “And Saudi Arabia does have some heavy production.”
Motiva’s unique market position means it stands to benefit as a foreign firm, as other companies struggle to comply with complex and confusing sanctions.
Aramco is one of the largest swing producers of a wide variety of crude oil stocks, including everything from its brand of “Arabian Heavy” to “Arabian Super Light,” according to the company.
The flexibility gives Motiva a strategic advantage as sanctions ratchet up over the next month and refiners are faced with increased restrictions and finding new sources of heavy oil.
The U.S. is the largest global producer of lighter, easier-to-refine crude oil, but most of that is being exported and not refined on the Gulf Coast, say industry officials.
Nevertheless, Saudi oil exports to the United States have decreased significantly in the last week, as OPEC production cuts kick in, according to the Energy Information Administration, the federal government’s independent energy analysis agency.
Oil imports from Saudi Arabia fell by an average of well over a half-million barrels per day in the last week, going from nearly 1 million barrels per day last week to just around 440,000 barrels per day as of Jan. 25, according to the agency’s weekly oil report.
In 2018, Saudi Arabia supplied an average of almost 12 percent of oil imported into the United States, ranking as the number two supplier of crude oil. Canada was number one, supplying over 43 percent of crude oil, with Venezuelan imports ranking third largest at just under 8 percent, according to the agency.
Motiva did not respond to a request for comment.
