(Oil & Gas 360) By Greg Barnett, MBA – Where Did the Barrels Go? The first question was who controlled the barrels. The second was whether American and North American rigs, oilfield services and capital would actually show up to develop them.
There is a third question, and unlike 65 billion barrels underground, this one can be watched moving across the water:
Where have Venezuela’s barrels actually gone since January?
The answer matters because the Trump administration is no longer describing Venezuela simply as an oil-producing country being reopened to investment. The White House now explicitly frames its Venezuela strategy as a reassertion of the Monroe Doctrine and an effort to remove Chinese and Russian influence from the Western Hemisphere.
If that is the policy, following the tankers may be one of the cleanest ways to see whether it is working.
January Changed the Map
In January, immediately after the U.S. capture of Nicolás Maduro and the restructuring of Venezuela’s oil trade, Venezuelan exports rebounded to roughly 800,000 barrels per day from 498,000 bpd in December, according to Reuters’ review of shipping data.
The United States became Venezuela’s largest destination. Chevron moved about 220,000 bpd to the United States. China received about 156,000 bpd. Cuba received none.
That is a remarkable change in an oil trade that for years had been forced away from its natural refining market on the U.S. Gulf Coast and toward Asia.
But the January number does not tell the entire story.
Treasury authorized Vitol and Trafigura to market Venezuelan crude. Together they exported roughly 12 million barrels during January, initially sending much of it into Caribbean storage before reselling cargoes into the United States, Europe and India.
By July, the redirection was much harder to miss. Venezuela exported about 1.16 million bpd. Shipments to the United States had risen to approximately 786,000 bpd, the highest since early 2019. India received about 178,000 bpd and Europe about 82,200 bpd. Chevron exported approximately 293,000 bpd while Vitol, Trafigura and Novum Energy moved about 604,000 bpd.
EIA’s official monthly data, which use a different accounting methodology and lag shipping estimates, show the same direction. U.S. crude imports from Venezuela rose from 200,000 bpd in January to 471,000 bpd in May. Nearly all of those May crude imports entered PADD 3, the Gulf Coast.
The artery has clearly been reopened.
The Old CITGO System
Where do the barrels go once they arrive?
For decades the answer began with CITGO.
CITGO’s three-refinery system can process up to 829,000 barrels per day. Lake Charles, Louisiana, is the largest at 479,000 bpd. Corpus Christi, Texas, can process 167,000 bpd. Lemont, Illinois, can process 183,000 bpd, and CITGO describes Lemont as purpose-built for heavy crude processing.
The historical logic was straightforward. Venezuela produced heavy, sour crude. Its U.S. refining system was built to turn difficult barrels into high-value products.
But the old vertically integrated Venezuelan system has been broken apart. CITGO remains Venezuelan-owned today, but a Delaware court-supervised creditor process could transfer ownership to Amber Energy, an Elliott Investment Management affiliate, subject to final approvals including U.S. Treasury action.
That creates one of the more unusual features of the current restructuring: Venezuela is being repositioned as a major supplier to the United States at the same time it may lose the U.S. refining network that once anchored its downstream strategy.
The replacement does not require recreating the old CITGO model. The Gulf Coast already contains some of the world’s most sophisticated heavy-crude refining capacity.
Pascagoula Is Already in the Story
Chevron’s Pascagoula, Mississippi refinery, its largest, is a particularly obvious example.
Pascagoula can process approximately 369,000 barrels per day. Chevron says most of its crude arrives from foreign sources by marine tanker at the refinery’s terminal on Bayou Casotte, adjacent to the Port of Pascagoula. Tankers deliver crude directly to the refinery wharf, where pipelines move it into storage.
And Chevron CEO Mike Wirth supplied a number in January that deserves considerably more attention.
Chevron was already sending approximately 50,000 bpd of Venezuelan crude to Pascagoula. Wirth said Chevron’s U.S. refineries could process another 100,000 bpd of Venezuelan crude, specifically identifying Pascagoula and Chevron’s West Coast system.
That is not a theoretical outlet. The producer, tanker system, marine terminal and refinery already exist.
Vitol and Trafigura Reopened the Commercial Artery
Valero and Phillips 66 moved quickly as well. In January, both bought Venezuelan cargoes from Vitol. Reuters reported that the crude was sold to the refiners at discounts of roughly $8.50 to $9.50 per barrel to Brent. Vitol and Trafigura had reportedly acquired Venezuelan crude at about a $15 discount to Brent, with shipping costs of approximately $2.50 to $3.50 per barrel, leaving trading margins estimated at $2 to $4 per barrel.
By July, Phillips 66 had resumed direct purchases from PDVSA and Valero was expected to do the same. The middlemen who were essential to restarting the artery were already beginning to lose some of their role as refiners and producers re-established direct commercial relationships.
That progression may be exactly what Washington intended.
Vitol and Trafigura could move quickly. They had the trading desks, chartering capability, storage relationships, credit arrangements and tolerance for a rapidly changing sanctions environment. The large U.S. refiners could then enter as legal and commercial channels became clearer.
The ships themselves add another layer.
Vitol and Trafigura are traders and charterers, not necessarily the owners of the tankers carrying every cargo. Venezuelan crude has moved on foreign-owned and foreign-flagged vessels operated by a variety of international shipping companies. The physical supply chain is therefore more international than the policy language might suggest.
But ownership of the tanker is not the same thing as control of the trade.
Treasury licenses determine who can legally market the oil. Cargo origin, vessel identity, AIS movements, bills of lading, storage transfers, customs entries and refinery receipts create a trail from Venezuelan terminal to final buyer. Commercial tanker-tracking firms reconstruct much of that trail in real time.
Follow the Dollars Too
What is public about U.S. government control is even more important than what might be happening inside intelligence agencies.
On January 9, President Trump issued Executive Order 14373 establishing protection for “Foreign Government Deposit Funds” derived from Venezuelan natural-resource sales and diluent transactions. The order states explicitly that these funds remain property of the Government of Venezuela. The United States holds them in a custodial governmental capacity.
The Secretary of Treasury is instructed to follow the Secretary of State’s directions regarding disbursements, in consultation where appropriate with the Attorney General and Secretary of Energy.
Then, on January 28 and 29, State established specific Treasury accounts.
19X6222 is the “Venezuela Custody Deposit Fund, State.”
19X6222.1 is even more specific: “Venezuela Custody Deposit Fund, Oil, State.”
That is worth stopping over.
The barrels are not merely being licensed by Washington. The proceeds from at least part of the trade are being routed through a financial architecture in which the U.S. government exercises custody and State controls authorized disbursement.
Reuters reported in January that oil-sale proceeds were being held in a Qatar-based account under U.S. supervision. The first $300 million was allocated through four Venezuelan banks to provide dollars for importers and other economic needs. Reuters also reported that the initial U.S.-Venezuela arrangement contemplated up to $2 billion of oil sales.
So there are really two trails to follow.
One is the barrel: Venezuela to tanker to storage, if necessary, to U.S.-friendly buyer and ultimately refinery.
The other is the dollar: buyer to controlled payment mechanism to Venezuelan sovereign funds, with Washington exercising extraordinary authority over how those funds can move.
That raises legitimate questions. How much money has flowed through the Venezuela Custody Deposit Fund, Oil? Which sales are captured by it? How much has been disbursed? For what purposes? What reporting does Congress receive? And how does that structure evolve as refiners move from purchases through Vitol and Trafigura toward direct contracts with PDVSA and joint-venture producers?
Those are questions, not allegations.
The same discipline applies to the intelligence question. Given the U.S. government’s strategic objective of reducing Chinese, Russian and Cuban influence over Venezuelan petroleum, it is reasonable to ask which U.S. agencies monitor cargoes, counterparties and payment flows. There is no public evidence found for this article establishing that the CIA tracks individual Vitol or Trafigura cargoes. There is abundant public evidence that Treasury, State and other U.S. authorities possess the legal and financial mechanisms to follow and control substantial parts of the trade.
China Lost Position; Cuba Lost Its Supply
And China has unquestionably lost position.
Before January, Venezuelan crude had become deeply tied to China, including oil used in connection with Chinese debt. Reuters reported in January that roughly 10% of Venezuela’s estimated $150 billion foreign debt was owed to China and that oil had historically been used to service those obligations. The new U.S.-controlled sales structure disrupted that arrangement, with proceeds instead moving into the U.S.-supervised system.
Cuba’s artery was cut more dramatically. Venezuela had supplied roughly 26,500 bpd to Cuba in 2025, about one-third of Cuba’s daily petroleum needs. By January, Reuters shipping data showed no Venezuelan exports to the island.
The question in the title therefore has an increasingly clear answer.
Since January, Venezuelan barrels have moved overwhelmingly toward markets Washington either controls directly or regards as commercially and strategically acceptable: the United States first, with India and Europe as important additional destinations. China has received some crude, but at sharply reduced levels. Cuba was cut off.
North Korea does not belong on that list. We found no credible evidence that it has been a meaningful destination for Venezuelan crude during this period.
The Next Wave of Barrels
The transformation is particularly visible on the U.S. Gulf Coast. EIA data show Venezuelan crude imports rising rapidly. Chevron can put additional Venezuelan barrels into Pascagoula. Valero and Phillips 66 are buying. CITGO’s heavy-crude refineries remain physically positioned to process the grades even as their ownership hangs in a creditor proceeding.
And Washington wants more.
The newly announced NABEP agreement gives the U.S. a guaranteed right to purchase 20% of production from current and future NABEP fields at production cost and a right of first refusal on the remaining 80%. The administration has also discussed Venezuelan crude as a source for replenishing the Strategic Petroleum Reserve.
If NABEP eventually reaches its production objectives, the logistics question becomes much larger than the cargoes moving today.
Where will another several hundred thousand barrels per day go? Which Gulf Coast refineries have the greatest appetite for Merey and other Venezuelan heavy grades? Does Pascagoula take materially more? Do Valero and Phillips 66 expand direct contracts? What role does CITGO play under new ownership? How much goes to the SPR? And how much Venezuelan crude will Washington permit to move back toward China?
The Monroe Doctrine can be expressed in speeches. It can also be expressed in tanker routes.
Since January, those routes have changed.
The next time a Venezuelan tanker leaves José, the important questions are no longer simply how many barrels are aboard.
They are where the ship is headed, who bought the cargo — and where the money goes.
By oilandgas360.com contributor Greg Barnett, MBA.
The views expressed in this article are solely those of the author and do not necessarily reflect the opinions of Oil & Gas 360. Please consult with a professional before making any decisions based on the information provided here. Please conduct your own research before making any investment decisions.
