Sanctions on Venezuela hit the oil market in a sensitive place

The deepening crisis with Venezuela predicts a shortage of heavy grades of oil they produce, leaving the fuel market in the grip and grace of US shale business.

The US government has imposed new sanctions on state oil companies in Venezuela in an attempt to prevent oil sales to the United States. The measure jeopardizes deliveries of more than 500,000 barrels of oil per day to the United States. Although supplies have fallen by 50% over the past 10 years, US manufacturers will now have to fill the gaps.

US companies that produce shale gas have reached levels of production that have surpassed expectations at record levels. Now they produce oil that is low and contains low levels of sulfur or "sweet" and low density "light". Light, sweet oil is abundant in the US, compared to the heavy and dense oil that countries like Venezuela produce.

Many US refineries have adapted to the processing of a mixture of light and heavy oil varieties and need both types to produce fuels such as diesel and gasoline.

Exactly declining supplies from Venezuela and other exporters, combined with good economic data, dragged crude oil prices to a two-month high of $ 55.26 a barrel.

Source: The Wall Street Journal

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