\n<\/p>\n
The United States\u2019 bid to control Venezuela\u2019s oil sector after abducting Venezuelan President Nicolas Maduro has shone a spotlight on the type of crude held by the Latin American country.<\/p>\n
Crude oil, which is produced by about 100 countries, comes in hundreds of varieties that differ by viscosity and sulfur content.<\/p>\n list of 4 items<\/span>end of list<\/span><\/section>\n While all grades of crude oil are valuable, their differing properties make certain grades more sought after in some markets than others.<\/p>\n Crude oils are rated as \u201cheavy\u201d or \u201clight\u201d based on their viscosities, or \u201cgravities\u201d.<\/p>\n Crude is also classified by sulfur content, with high-sulfur grades called \u201csour\u201d and lower-sulfur varieties referred to as \u201csweet\u201d.<\/p>\n Heavy, sour grades are more difficult and costly to refine into petroleum products such as gasoline, diesel, kerosene and jet fuel.<\/p>\n Generally speaking, lighter and sweeter crude commands higher prices.<\/p>\n Some countries and regions\u00a0primarily produce\u00a0certain grades.<\/p>\n Canada\u00a0mainly\u00a0produces\u00a0heavy, sour crude, for example, while\u00a0African varieties\u00a0tend to be lighter and sweeter.<\/p>\n Popular light, sweet varieties include Saudi Arabia\u2019s Arabian Super Light, Iran\u2019s South Pars Condensate, Malaysia\u2019s Tapis Blend, and Australia\u2019s Cossack.<\/p>\n Among the most traded heavy, sour varieties are China\u2019s Shengli, the United Kingdom\u2019s Kraken, Iraq\u2019s Basra Heavy, and Iran\u2019s Soroosh.<\/p>\n Venezuela\u00a0has the world\u2019s largest proven oil reserves, at an estimated\u00a0303 billion barrels.<\/p>\n Most of those reserves are made up of heavy, sour crude located in the Orinoco Oil Belt in the centre of the country.<\/p>\n The basin\u2019s oil is especially dense and vicious, with a tar-like consistency that necessitates specialist methods such as steam injection and diluents for extraction.<\/p>\n Industry analysts say tapping the basin\u2019s true potential will require huge investment due to the degraded state of the sector\u2019s infrastructure and knowledge base, following late leader Hugo Chavez\u2019s nationalisation of the industry and years of US sanctions that prevented Venezuela from accessing foreign capital and modern technology.<\/p>\n The Latin American country\u2019s output was estimated at about 860,000 barrels per day (bpd) in November, less than 1 percent of the world\u2019s total, a steep decline from its 1970s peak of about 3.5 million bpd.<\/p>\n Rystad Energy, a consultancy based in Oslo, Norway, has estimated that about $110bn in capital investment would be needed to return to the country\u2019s late 2000s output of about 2 million bpd.<\/p>\n US President Donald Trump, whose decision to kidnap Maduro\u00a0has been widely condemned as a violation of international law, has said US oil companies are prepared to invest billions of dollars to revive production.<\/p>\n Some industry analysts have expressed scepticism that US oil companies will be drawn to Venezuela \u2013 at least not without significant incentives and guarantees.<\/p>\n They point to the post-Maduro leadership uncertainty, Chavez\u2019s past expropriation of company assets, and the excess supply of oil in the global market as reasons why firms may be hesitant to invest.<\/p>\n ExxonMobil and ConocoPhillips, two of the biggest US oil firms, pulled out of the country in 2007 following Chavez\u2019s seizure of their facilities, and the two companies were later awarded large payouts in international arbitration.<\/p>\n At a meeting with Trump at the White House on Friday, ExxonMobil Chief Executive Officer Darren Woods described Venezuela as \u201cuninvestable\u201d in its current state and said \u201csignificant changes\u201d would need to occur in the country to justify returning.<\/p>\n As the only major US oil producer in the country at present, Chevron, which operates under special exemption from Washington\u2019s sanctions, is widely viewed as best positioned to profit on Trump\u2019s plans.<\/p>\n While there are differing views on the business case for the major oil companies in Venezuela, analysts are in agreement that one group in particular stands to gain: US refineries.<\/p>\n While the US currently pumps more crude than any other country due to an explosion in drilling for lighter shale oil, most of the country\u2019s refineries were built to process heavier grades.<\/p>\n Nearly 70 percent\u00a0of US refining capacity\u00a0is designed\u00a0for\u00a0heavier crude,\u00a0according to the\u00a0American Fuel and Petrochemical Manufacturers, a relic of heavy investment\u00a0made\u00a0before the more recent boom in shale drilling.<\/p>\n \u201cYou need what is referred to as a \u2018complex\u2019 refinery with deep conversion capacities. The Gulf Coast has multiple refineries like that,\u201d Denton Cinquegrana, chief oil analyst at Oil Price Information Service, told Al Jazeera.<\/p>\n \u201cThe coker units that are key were built to take advantage of heavy crude not just from Venezuela, but also places like Mexico and other South American producers.\u201d<\/p>\n Shon Hiatt, director of the Zage Business of Energy Initiative at the University of Southern California,\u00a0said\u00a0US refineries would benefit \u201ctremendously\u201d from a boost in exports of Venezuelan crude.<\/p>\n \u201cMany of the\u00a0US\u00a0refineries along the coast \u2013 Texas and Louisiana \u2013 were built and designed to process Venezuela crude,\u201d\u00a0Hiatt told Al Jazeera.<\/p>\n \u201cVenezuela has a history of exporting its\u00a0oil\u00a0to the US due to the fact that US\u00a0oil\u00a0companies were the first to go in, discover, pump, process, and export Venezuelan petroleum. Hence, refineries along the coast were built to handle this type of petroleum.\u201d<\/p>\n While heavy Canadian crude has displaced imports from Venezuela over the years due to sanctions, that could change if Trump has his way, Hiatt said.<\/p>\n \u201cIf the Venezuelan heavy crude exports increase, it will displace the Canadian heavy crude as Venezuelan crude typically is sold at a lower price to these refineries,\u201d he added.<\/p>\n<\/div>\n The United States\u2019 bid to control Venezuela\u2019s oil sector after abducting Venezuelan President Nicolas Maduro has shone a spotlight on the type of crude held by the Latin American country. Crude oil, which is produced by about 100 countries, comes in hundreds of varieties that differ by viscosity and sulfur content. Recommended Stories list of […]<\/p>\n","protected":false},"author":1,"featured_media":8820,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-8819","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-explained"],"_links":{"self":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/8819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8819"}],"version-history":[{"count":0,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/posts\/8819\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=\/wp\/v2\/media\/8820"}],"wp:attachment":[{"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/inernews.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Recommended Stories <\/h2>\n
What is the difference between \u2018heavy\u2019 and \u2018light\u2019 grades of oil?<\/h2>\n
What type of oil does Venezuela have?<\/h2>\n
Why is Venezuela\u2019s heavy crude particularly attractive for the US?<\/h2>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"