U.S. demand for imported fuel oil is expected to decrease this year as refiners turn to heavy Venezuelan crude, allowing for more domestically produced fuel oil that can be upgraded into higher-value products like gasoline and diesel. The ouster of Venezuelan President Nicolas Maduro is shifting global oil flows, creating opportunities for U.S. refiners on the Gulf Coast. Refiners Valero and Phillips 66 have secured cargoes of Venezuelan crude following President Trump’s control of the country’s oil.

Refining analysts predict that U.S. Gulf Coast refiners could absorb an additional 600,000 barrels per day of Venezuelan crude, leading to a redirection of current exports. This shift in demand for imported fuel oil from the U.S. will have a ripple effect on European fuel oil markets, potentially lowering prices as global supply increases. U.S. Gulf Coast refineries capable of processing Venezuelan crude may reduce imports of Iraqi fuel oil, impacting fuel oil cracks in Europe.

Data from Kpler show a significant increase in U.S. Gulf Coast fuel oil imports from Iraq between 2019 and 2025, potentially reaching 61,000 bpd from the previous 7,000 bpd. As cokers approach full operations, fuel oil cracking margins in the Atlantic Basin are expected to soften, with Amsterdam-Rotterdam-Antwerp barge cracking margins hitting over 18-month lows in January. The drop in U.S. demand for imported fuel oil is likely to have a broad impact on global fuel markets, reshaping trade flows and pricing dynamics.

Read more at Yahoo Finance: Return of Venezuelan crude could cut US fuel oil imports