Venezuela sanctions: will they disrupt the market?

The recent US sanctions imposed on PDVSA ban any petroleum product trade with Venezuela and establishes a wind-down period for US companies currently operating in the country. This impacts Venezuela´s oil production, US Gulf Coast refiners who are regular customers of Venezuelan heavy crude, and the oil market. The outcome of the stand off between Maduro and Guaidó is uncertain. However we have analysed the global impact of the sanctions under a set of assumptions for 2019. In this insight we assess the impact of sanctions on global oil trade, crude prices and Venezuela’s oil production: -How will US Gulf Coast refiners respond to the cut off of Venezuelan crude imports and its implications for Asia -What logistic constraints could PDVSA face diverting its crude exports to Asia -What is the impact of diluent constraints -Are Brent oil prices affected by a heavy oil squeeze -How quickly can oil production recover and by how much