The prospect of further falls in Venezuela’s oil output after the US and Canada embraced its opposition leader as interim president caused tremors in energy markets, underlining the Opec member’s important, if fading, stature as a producer.  Venezuela’s crude oil output has plunged in recent years as the economic and political crisis in the country has all but paralyzed its energy industry.

Its production in December was 1.1m barrels a day, or less than 1.5 percent of global supply, and down from 1.9m barrels a day in 2017, according to Opec’s monthly report.  The US remains a significant buyer, however. US oil refineries imported an average of 500,000 b/d of Venezuela’s heavy, high-sulfur “sour” oil in the first 10 months of 2018. This made it the fourth-largest supplier after Canada, Saudi Arabia, and Mexico, according to the US Energy Information Administration.

The biggest importers are refineries ringing the US Gulf of Mexico operated by Chevron, PBF Energy, Valero Energy, and Venezuela-controlled Citgo, EIA data show. Shares of the former three declined amid a rally in broader US stocks, with PBF 1.9 percent lower and Valero down 2.7 percent.  “Refiners on the US Gulf Coast are very concerned. We don’t have all the details yet but if we do lose Venezuelan barrels, even if it means some supplies can be rerouted from Asia, it will still cause a huge disruption,” said Amrita Sen, chief oil analyst at Energy Aspects, a consultancy.

Values of competing grades of sour crude have rallied this month. The rise continued after Wednesday’s announcement.  West Texas Sour crude sold for a discount of just 35 cents a barrel below US light, sweet benchmark West Texas Intermediate, compared with a discount of $2.50 below WTI last week, according to Bloomberg data. WTI futures climbed 0.1 per cent to settle at $52.62.