Phillips 66 and Citgo Plan to Buy Heavy Crude Directly from Venezuela
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 hours ago
0mins
Phillips 66 (PSX) and Citgo Petroleum are planning to start buying heavy crude directly from Venezuela's state oil company PDVSA as early as April, aiming to boost profitability by bypassing trading houses and U.S. oil major Chevron (CVX), Reuters' Nicole Jao, Arathy Somasekhar and Marianna Parraga report. This shift comes as broader U.S. authorizations expand Venezuelan oil exports, although logistical challenges remain, especially for deliveries to Gulf Coast refineries, and companies must navigate U.S. Treasury licensing and sanctions complexities, the report notes. Valero (VLO) plans to buy directly from PDVSA later in the year after it assesses the condition of Venezuela's loading infrastructure, three sources say.
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Analyst Views on PSX
Wall Street analysts forecast PSX stock price to fall
15 Analyst Rating
8 Buy
7 Hold
0 Sell
Moderate Buy
Current: 158.160
Low
110.00
Averages
132.40
High
162.00
Current: 158.160
Low
110.00
Averages
132.40
High
162.00
About PSX
Phillips 66 is a diversified and integrated downstream energy provider that manufactures, transports and markets products. The Company's Midstream segment provides crude oil and refined petroleum product transportation, terminating and processing services, as well as natural gas and natural gas liquids (NGL) transportation, storage, fractionation, gathering, processing and marketing services. Its Chemicals segment consists of its 50% equity investment in Chevron Phillips Chemical Company LLC, which manufactures and markets petrochemicals and plastics on a worldwide basis. Its Refining segment refines crude oil and other feedstocks into petroleum products, such as gasoline, distillates, including aviation fuels. Its Marketing and Specialties segment purchases for resale and markets refined products, mainly in the United States and Europe. Its Renewable Fuels segment processes renewable feedstocks into renewable products at the Rodeo Renewable Energy Complex and at its Humber Refinery.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Phillips 66 and Citgo to Directly Purchase Venezuelan Heavy Crude
- Direct Procurement Strategy: Phillips 66 and Citgo are planning to purchase heavy crude directly from Venezuela's state oil company PDVSA, aiming to maximize profits by cutting out intermediaries, thereby enhancing their competitiveness in the U.S. market.
- Compliance and Transport: Phillips 66 is seeking compliance and internal approvals to buy crude directly from PDVSA and transport it to its Gulf Coast facilities, a move that will help reduce procurement costs and improve operational efficiency.
- Market Opportunity Capture: Citgo plans to leverage the general license to purchase crude directly from Venezuela, expecting to process this crude at its Gulf Coast refineries in the coming months, further strengthening its market position.
- Future Procurement Plans: Valero is expected to buy directly from PDVSA later this year after assessing the condition of Venezuela's loading infrastructure, indicating a growing interest among U.S. refiners in the Venezuelan market.
See More
Oil Refiners Experience a Golden Era
- Refining Profits Surge: Oil refiners are experiencing significant profit increases due to falling crude costs and rising product demand, with Marathon Petroleum reporting a margin of $18.65 per barrel in Q4, a 50% increase year-over-year.
- Strong Market Demand: Global liquid fuel consumption is projected to rise by 1.2 million barrels per day in 2026, driven by increased manufacturing, trucking, and air travel, which will further enhance refiners' market positions.
- Declining Crude Prices: The EIA forecasts that Brent crude will average $58 per barrel in 2026, down from $69 in 2025, providing refiners with lower input costs and potentially higher margins.
- Optimistic Investment Outlook: Given the current market dynamics, refining stocks have shown impressive performance with a year-to-date return of 25% in 2026, making a modest investment a potentially lucrative opportunity for investors.
See More
Oil Refiners Soar in 2026: Investment Insights
- Refining Margins Surge: In 2026, refiners like Marathon Petroleum reported a margin of $18.65 per barrel, a 50% increase year-over-year, indicating strong profitability in the refining sector amidst falling crude prices, which is likely to attract more investor interest.
- Demand Growth vs. Capacity Constraints: Despite forecasts of declining crude prices, the EIA projects a 1.2 million barrels per day increase in liquid fuel consumption in 2026, driving demand for gasoline, diesel, and jet fuel beyond refining capacity, thereby enhancing profit margins for refiners.
- Strong Market Performance: As of February 11, 2026, stocks of Marathon Petroleum, Phillips 66, and Valero Energy have risen 28%, 25%, and 25% year-to-date, significantly outperforming the S&P 500's 1.6% increase, reflecting robust market confidence in the refining industry.
- Optimistic Future Outlook: While risks such as Middle Eastern conflicts or economic recessions exist, refining stocks are seen as having further upside potential, making a $1,000 investment at this time potentially lucrative, especially given the positive industry outlook.
See More
Oil Price Drop Fuels Refining Stocks Surge
- Optimistic Refining Outlook: The drop in crude oil prices has led to Marathon Petroleum achieving a fourth-quarter profit margin of $18.65 per barrel, approximately 50% higher than the previous year, indicating strong profitability and market demand for refiners.
- Sustained Demand Growth: Global liquid fuel consumption is projected to increase by 1.2 million barrels per day in 2026 and another 1.3 million barrels per day in 2027, primarily driven by manufacturing, trucking, and air travel, further solidifying the refining sector's market position.
- Significant Margin Increases: The 3-2-1 crack spread rose about 45% in the fourth quarter, indicating expanded profit margins for refiners, with Phillips 66's margin doubling to $12.48 per barrel and Valero's margin climbing 61%, reflecting a robust industry recovery.
- Positive Future Outlook: Despite risks from potential Middle East conflicts or economic recessions, crude prices are expected to continue falling, with the EIA forecasting an average Brent crude price of $58 per barrel in 2026, which bodes well for refiners and their shareholders.
See More
PBF Energy Reports Surprise Profit in Q4 Amid Supply Disruptions
- Surprise Profit: PBF Energy reported an adjusted profit of $0.49 per share in Q4, surpassing estimates of a $0.10 loss, indicating a significant rebound in refining margins due to supply disruptions from the Russia-Ukraine war and improved crude price differentials.
- Refining Margin Recovery: The U.S. refining sector experienced a sharp recovery in Q4, with the 3-2-1 crack spread benchmark rebounding from multi-year lows earlier in 2024, driven by tighter global fuel supplies and seasonal demand increases, which bolstered profitability.
- Increased Throughput: PBF's crude oil and feedstocks throughput rose to 888,900 barrels per day in the reported quarter, up from 862,000 barrels per day a year earlier, reflecting the company's ability to capitalize on market recovery opportunities.
- New Refinery Construction Update: PBF expects the construction of its Martinez refinery in California to be completed by February 16, 2026, with the catalytic cracking unit anticipated to start in the first week of March, further enhancing the company's production capacity and competitive position in the market.
See More
Phillips 66 Declares Quarterly Dividend Increase
- Dividend Increase: The board of directors of Phillips 66 has declared a quarterly dividend of $1.27 per share, reflecting a $0.07 increase, payable on March 4, 2026, demonstrating the company's confidence in its future cash flows.
- Commitment to Returns: CEO Mark Lashier emphasized that the strength and durability of cash flows from their combined businesses support the priority of returning capital to shareholders through a secure, competitive, and growing dividend.
- Historical Performance: Since its formation in 2012, Phillips 66 has increased its annual dividend every year, achieving a significant 15% compound annual growth rate, showcasing the company's ongoing commitment to shareholder returns.
- Company Overview: Phillips 66 is a leading integrated downstream energy provider, involved in midstream, chemicals, refining, marketing, and renewable fuels, dedicated to safely and reliably providing energy while pursuing a lower-carbon future.
See More
Phillips 66 and Citgo to Directly Purchase Venezuelan Heavy Crude
- Direct Procurement Strategy: Phillips 66 and Citgo are planning to purchase heavy crude directly from Venezuela's state oil company PDVSA, aiming to maximize profits by cutting out intermediaries, thereby enhancing their competitiveness in the U.S. market.
- Compliance and Transport: Phillips 66 is seeking compliance and internal approvals to buy crude directly from PDVSA and transport it to its Gulf Coast facilities, a move that will help reduce procurement costs and improve operational efficiency.
- Market Opportunity Capture: Citgo plans to leverage the general license to purchase crude directly from Venezuela, expecting to process this crude at its Gulf Coast refineries in the coming months, further strengthening its market position.
- Future Procurement Plans: Valero is expected to buy directly from PDVSA later this year after assessing the condition of Venezuela's loading infrastructure, indicating a growing interest among U.S. refiners in the Venezuelan market.
See More
Oil Refiners Experience a Golden Era
- Refining Profits Surge: Oil refiners are experiencing significant profit increases due to falling crude costs and rising product demand, with Marathon Petroleum reporting a margin of $18.65 per barrel in Q4, a 50% increase year-over-year.
- Strong Market Demand: Global liquid fuel consumption is projected to rise by 1.2 million barrels per day in 2026, driven by increased manufacturing, trucking, and air travel, which will further enhance refiners' market positions.
- Declining Crude Prices: The EIA forecasts that Brent crude will average $58 per barrel in 2026, down from $69 in 2025, providing refiners with lower input costs and potentially higher margins.
- Optimistic Investment Outlook: Given the current market dynamics, refining stocks have shown impressive performance with a year-to-date return of 25% in 2026, making a modest investment a potentially lucrative opportunity for investors.
See More
Oil Refiners Soar in 2026: Investment Insights
- Refining Margins Surge: In 2026, refiners like Marathon Petroleum reported a margin of $18.65 per barrel, a 50% increase year-over-year, indicating strong profitability in the refining sector amidst falling crude prices, which is likely to attract more investor interest.
- Demand Growth vs. Capacity Constraints: Despite forecasts of declining crude prices, the EIA projects a 1.2 million barrels per day increase in liquid fuel consumption in 2026, driving demand for gasoline, diesel, and jet fuel beyond refining capacity, thereby enhancing profit margins for refiners.
- Strong Market Performance: As of February 11, 2026, stocks of Marathon Petroleum, Phillips 66, and Valero Energy have risen 28%, 25%, and 25% year-to-date, significantly outperforming the S&P 500's 1.6% increase, reflecting robust market confidence in the refining industry.
- Optimistic Future Outlook: While risks such as Middle Eastern conflicts or economic recessions exist, refining stocks are seen as having further upside potential, making a $1,000 investment at this time potentially lucrative, especially given the positive industry outlook.
See More
Oil Price Drop Fuels Refining Stocks Surge
- Optimistic Refining Outlook: The drop in crude oil prices has led to Marathon Petroleum achieving a fourth-quarter profit margin of $18.65 per barrel, approximately 50% higher than the previous year, indicating strong profitability and market demand for refiners.
- Sustained Demand Growth: Global liquid fuel consumption is projected to increase by 1.2 million barrels per day in 2026 and another 1.3 million barrels per day in 2027, primarily driven by manufacturing, trucking, and air travel, further solidifying the refining sector's market position.
- Significant Margin Increases: The 3-2-1 crack spread rose about 45% in the fourth quarter, indicating expanded profit margins for refiners, with Phillips 66's margin doubling to $12.48 per barrel and Valero's margin climbing 61%, reflecting a robust industry recovery.
- Positive Future Outlook: Despite risks from potential Middle East conflicts or economic recessions, crude prices are expected to continue falling, with the EIA forecasting an average Brent crude price of $58 per barrel in 2026, which bodes well for refiners and their shareholders.
See More
PBF Energy Reports Surprise Profit in Q4 Amid Supply Disruptions
- Surprise Profit: PBF Energy reported an adjusted profit of $0.49 per share in Q4, surpassing estimates of a $0.10 loss, indicating a significant rebound in refining margins due to supply disruptions from the Russia-Ukraine war and improved crude price differentials.
- Refining Margin Recovery: The U.S. refining sector experienced a sharp recovery in Q4, with the 3-2-1 crack spread benchmark rebounding from multi-year lows earlier in 2024, driven by tighter global fuel supplies and seasonal demand increases, which bolstered profitability.
- Increased Throughput: PBF's crude oil and feedstocks throughput rose to 888,900 barrels per day in the reported quarter, up from 862,000 barrels per day a year earlier, reflecting the company's ability to capitalize on market recovery opportunities.
- New Refinery Construction Update: PBF expects the construction of its Martinez refinery in California to be completed by February 16, 2026, with the catalytic cracking unit anticipated to start in the first week of March, further enhancing the company's production capacity and competitive position in the market.
See More
Phillips 66 Declares Quarterly Dividend Increase
- Dividend Increase: The board of directors of Phillips 66 has declared a quarterly dividend of $1.27 per share, reflecting a $0.07 increase, payable on March 4, 2026, demonstrating the company's confidence in its future cash flows.
- Commitment to Returns: CEO Mark Lashier emphasized that the strength and durability of cash flows from their combined businesses support the priority of returning capital to shareholders through a secure, competitive, and growing dividend.
- Historical Performance: Since its formation in 2012, Phillips 66 has increased its annual dividend every year, achieving a significant 15% compound annual growth rate, showcasing the company's ongoing commitment to shareholder returns.
- Company Overview: Phillips 66 is a leading integrated downstream energy provider, involved in midstream, chemicals, refining, marketing, and renewable fuels, dedicated to safely and reliably providing energy while pursuing a lower-carbon future.
See More
