Valero Energy Corporation VLO is asking for permission from the Biden administration to import Venezuela crude oil, per a report by Reuters.
Mar 31, 2023
Last November, the Biden administration eased some oil sanctions on Venezuela to support newly restarted negotiations between president Nicolás Maduro’s government and its opposition.
The Treasury Department authorized Chevron Corporation CVX to restart limited energy production in Venezuela after years of sanctions and bring the South American country’s crude oil to the United States.
In January 2023, Chevron resumed Venezuela oil flows to the United States under a Treasury Department license. The license allowed the company to expand oil production there and export it. Refiners, including Valero, have bought cargoes from Chevron.
However, Chevron’s resumption of Venezuela crude imports has not led to an increase in the country’s overall exports this year. In February, the company exported some 86,000 barrels per day of Venezuela crude oil.
The U.S. trading sanctions were first imposed on Venezuela’s state-run oil company PDVSA in 2019. Before this, Valero was among the top receivers of the South American country’s crude through long-term supply contracts.
Valero is seeking the Treasury Department’s permission for sanctions relief, allowing it to directly purchase crude oil from PDVSA. However, no decision is likely to occur soon, implying that the U.S. does not want further easing of Venezuela sanctions until president Nicolas Maduro makes political concessions to Venezuela’s opposition.
Shares of Valero have outperformed the industry in the past six months. The stock has gained 22% compared with the industry’s 9.4% growth.
Zacks Rank & Other Stocks to Consider
Valero currently carries a Zack Rank #2 (Buy).
Investors interested in the energy sector might look at the following companies that also presently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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