Valero CEO grabs billion dollar Venezuela oil advantage

The U.S. reset the global oil battlefield in January, removing Venezuelan President Nicolas Maduro and unlocking access to 303 billion barrels of oil—the world’s largest proven oil reserves. The move creates a massive profit opportunity up and down the oil food chain that refinery giant Valero is already tapping.

The White House has already approved imports of 50 million barrels of Venezuelan oil, worth roughly $2 billion. Valero’s (VLO) massive Gulf Coast refineries are perfectly positioned to turn Venezuela’s thick, heavy crude oil into high-value jet fuel and diesel, and the discount prices relative to other crude oil sources provide a major profit boost that’s already being realized.

Valero fast facts:

• Founded: January 1, 1980; a spinoff of the Coastal States Gas Corporation.
• Headquarters: San Antonio, Texas
• Employees: 10,000
• Facilities: 15 refineries in the United States, Canada and the United Kingdom
• Capacity: 3.2 million barrels per day (bpd) of high-complexity throughput capacity.
• Market capitalization: $61 billion.

The refiner has already locked up multiple shipments of Venezuelan oil from licensed sellers at discounts reportedly near $9 per barrel compared to Brent prices, according to Argus Research.

And while processing heavy crude is costly, Valero’s cost differential far outweighs the added expense. The new cokers installed at its massive Port Arthur refinery mean the refiner is in pole position to overtake Chevron as the largest importer of Venezuelan oil as early as March.

Valero leverages Venezuela for profit upside

Valero is one of the largest refinery operators in the United States, ranking second by total barrels per day capacity at 2.2 million. Its Port Arthur facility is the 10th-largest refinery in America, with a capacity of 360,000 bpd.

The company’s refinery portfolio is heavily tilted toward the Gulf Coast, and its production is specifically geared toward heavy crude, much of which has been supplied by Western Canada since restrictions were placed on Venezuela.

“Higher oil supply and exports from Venezuela would be tailwinds for U.S. coastal refiners,” wrote Morgan Stanley in a research report shared with TheStreet.

Biggest U.S. refining companies (2026)

• Marathon Petroleum Corp (MPC): Largest U.S. refiner with ~3 million barrels per day (bpd) capacity and 13 refineries, including refineries in Garyville, LA, and Galveston Bay, TX.
• Valero Energy Corporation (VLO): A massive independent refiner with 13 refineries, holding top-tier capacity in the Gulf Coast region, and specializing in heavy crude.
• ExxonMobil Corporation (XOM): Operates major, high-capacity refineries in Baytown, TX, Beaumont, TX, and Baton Rouge, LA.
• Phillips 66 (PSX): A major refiner with a high market cap, operating 9 refineries with significant capacity.
• Motiva Enterprises / Saudi Aramco: Operates the Port Arthur refinery in Texas, which is one of the largest single-site refineries in the U.S.

Before facing restrictions, Valero was processing about 240,000 bpd of Venezuelan oil, according to Randy Hawkins, the company’s Vice President of Crude & Feedstocks Supply & Trading.

That was before new cokers, which cook heavy oil to strip out carbon, turning it into sweet crude for processing, were installed at Port Arthur.

During Valero’s Q4 earnings call, Hawkins said that those new cokers added considerable heavy crude capacity, putting it in a position to significantly ramp beyond 240,000 bps to make the most of the crude oil differential.

Argus Research reports that “Valero has purchased Venezuelan crude from the three authorized sellers,” and Reuters reports that the refiner is on track to import “6.5 million barrels of Venezuelan crude in March bound for its Gulf Coast refineries.”

That pace would make Valero the biggest importer of Venezuelan oil, outpacing Chevron, which has the advantage of being the only oil major still operating there.

If Valero secures its 6.5 million barrels at a $9 discount, that totals about $58 million in raw material savings in a single month compared to buying light sweet crude at benchmark prices — bullish for the company’s refining margins.

Valero was already seeing a revenue, profit surge

The new Venezuelan sourcing should help an already expanding bottom line. In the fourth quarter, Valero reported revenue of $30.4 billion and operating income of $1.6 billion, up from $348 million a year ago.

The company’s refining margin per barrel swelled to $13.61 from $8.44, up 64%, as its per-barrel cost fell. For perspective, Western Canadian Select (WCS) crude prices dropped to $46 per barrel in Q4 from $58 the year prior.

“Sour crude differentials are also expected to benefit from increased Canadian crude production along with additional Venezuelan crude supply into the U.S.,” said CEO Lane Riggs on the earnings call.

The company’s expense control remains top of class, and the influx of even lower-cost crude oil from Venezuela in Q1 suggests yet another step forward for investors.

The new competition suggests even more favorable prices from Canada.

“Right now, we’re seeing heavy Canadian in the Gulf Coast trading at about $11 to $11.50 under Brent. That’s about $4 cheaper than our Q4 average,” said Hawkins.

Wall Street weighs in on Valero opportunity

Investors have woken up to the reality that Venezuelan oil is a major profit driver this year, driving Valero’s share price steadily higher. The company’s stock price has increased to $200 from $168 last September, and is up 23% year-to-date.

Across Wall Street, 9 of 15 analysts rate Valero a buy, including 5-star-rated UBS analyst Manav Gupta, according to TipRanks.

JP Morgan’s 4-star-rated analyst Zach Parham raised his Valero stock price target to $217 from $200 on Feb 2. No analysts rate Valero a “sell.”

Morgan Stanley views Valero and Marathon as most likely to benefit from widening differentials tied to rising Venezuelan oil imports, with its analysts expecting “tailwinds to realized refining margins.”