Venezuela #1 Beneficiary Of Blocked Keystone XL -- Bloomberg -- November 10, 2015; What Do You Think?

Back on November 5, 2015, I selected a few countries to see where the US was getting its imported oil. Venezuela stood out; while imports have been decreasing overall, US imports from Venezuela have been increasing. See data at the link which will also provide links to official government sites. (In retrospect, I might be wrong; snapshots of particular monthly imports can be deceiving; see below.)

I have talked about this before. US refiners along the Gulf Coast need heavy oil to off-set the glut of light oil.

US refiners along the Gulf Coast invested $6 billion to optimize their operations for heavy oil from Canada before the Bakken shale revolution. Refiners scrambled to figure out what to do. It turns out a blend of heavy oil and light oil works (though not as good as what the refiners had expected if using only heavy oil from Canada). Now we have a Bloomberg story that says the same thing -- regular readers of the blog and RBN Energy were already well aware of this. From the Bloomberg story:

President Barack Obama’s rejection of TransCanada Corp.’s proposed Keystone XL pipeline could give Venezuela’s ailing economy a lifeline.

With the world’s largest oil reserves, the South American country produces heavy crude that’s similar in consistency to the one coming from Canada’s oil sands, and its economy relies largely on shipping it to the same U.S. Gulf Coast refineries that Keystone XL was meant to supply.

“The number one beneficiary of all this will be Venezuela and other suppliers of heavy oil that ship to the Gulf Coast by tanker,” IHS Energy Inc. Vice President Jim Burkhard said by e-mail.

Venezuela is facing an economic crisis as the price of crude, its main source of revenue, has plummeted by more than half since June last year to trade below $50 a barrel. The slump has caused a rift within the Organization of the Petroleum Exporting Countries, of which Venezuela is a member, as Saudi Arabia continues to pump crude from the ground at an unprecedented pace.

The Canadians should be paying attention.

The Bloomberg article negates to tell us the the Keystone was dead November 10, 2011.  Wow, it's November 10th today -- that was exactly four years to the day that I said the Keystone was dead. Obama simply made it official last week, but it didn't change anything. Venezuela imports have been increasing ever since 2013.

By the way, although I showed data that US imports from Venezuela were increasing, in fact, the data is not so clear. One can take snapshots of various intervals and prove the opposite. Check out the Venezuela data for the past five years and I don't think it's all that clear. 

This will be very, very interesting to follow for the next twelve months -- to see if the official announcement made any real difference. I bet not based on past history.

Remember: the Bakken boom in North Dakota began in 2007. Imports from Venezuela started falling after that. The Keystone was dead as of 2011.