US Gulf coast mid-sulphur petroleum coke supplies will likely decrease later this year if the US government follows through on a threat to cancel Chevron's waiver allowing it to import and sell Venezuelan crude in the US.
Trump on 26 February said that his administration will not renew the waiver, which had been issued in 2022 under former US president Joe Biden's administration. The waiver had allowed US refineries to resume running Venezuelan crude for the first time since 2019. Stopping the flow of Venezuelan oil to the US Gulf will likely lead to tighter mid-sulphur coke supplies, as refineries tend to produce coke with a lower sulphur content when running Venezuelan crude.
US imports of Venezuelan crude jumped by 76pc to 83.55mn bl in full-year 2024 compared with 2023. Chevron's 357,000 b/d Pascagoula, Mississippi, refinery was the top taker at 18.83mn bl, making up 23pc of Venezuelan crude imports. Chevron's Pascagoula refinery has been producing coke with a lower sulphur content in recent months, market participants said.
Valero's 215,000 b/d St Charles refinery in Norco, Louisiana, was the second-leading destination for this crude last year, receiving 16.44mn bl, or 20pc of the US's crude imports from Venezuela that year. This refinery has shifted to producing some mid-sulphur coke recently as well, sources said. A February-loading cargo of St Charles coke with 5pc sulphur was sold in mid-January. Valero also had St Charles mid-sulphur coke supply available for loading in February and March, a trader said in mid-February.
US Gulf coast mid-sulphur coke supply was already set to decline this year because of the planned shutdown of LyondellBasell's 264,000 b/d Houston refinery, a mid-to-high sulphur coke producer. LyondellBasell had already shut a coking unit by the end of January and planned to shut a second coker in February.
Venezuelan coke output could fall as well, as much of the country's coke production comes as a byproduct from upgraders that process Venezuela's extra-heavy crude. Chevron had been importing condensate needed to dilute this crude, helping to boost output to its highest level since 2018. But the country has large stockpiles of coke, meaning lower production is not likely to affect seaborne supply in the near future.
