Fuel prices continue to climb as oil and gas companies break ties with Russia, which invaded Ukraine in February.oil has left a hole in Valero’s supply, the San Antonio-based energy company says alternatives are available in Latin America, the Middle East and Canada.Wednesday.
Before the cutoff, Valero was the United States’ largest importer of Russian oil and petroleum, representingfrom Russia, say analysts from Houston-based energy firm Tudor, Pickering, Holt & Co. Valero previously relied on Russia for nearly 13% of its crude oil imports, behind Mexico and Iraq, which provide the highest percentage of the company’s imported oil, according to 2021 figures from the U.S. Energy Information Administration. Valero also refines oil extracted in the U.S.
Ecuador, a former member of OPEC, reportedly plans to boost its oil production as barrels continue to trade for more than $100, notwithstanding some recent fluctuations. Ecuador also produces an alternative to heavy crude oil that could be especially valuable to refineries like those operated by Valero.
When crude prices go up, as they are now, refining companies’ margins are initially squeezed because of a lag in product prices. Morgan Stanley analyst Connor Lynagh also said U.S. refiners could benefit from the pain now being felt by European refineries, who relied on a much higher percentage of Russian oil. Valero in specific “has a strong ability to manage potential volatility” and has already begun adapting to market shifts, Lynagh said.