The most severe measures would bar U.S. imports of Venezuelan crude or prevent state oil giant Petróleos de Venezuela, S.A., or PDVSA, from transacting in U.S. dollars. But the Treasury Department is considering less severe penalties, The Wall Street Journal reported.

One measure reportedly under review is a ban on sales of U.S. light crude oil and condensate to Venezuela, which PDVSA uses to dilute its heavy crude before selling the oil to refineries. That would force PDVSA to buy those light grades from further afield, potentially Libya, Algeria and Nigeria, according to Andrew Lipow, president at Lipow Oil Associates.

“The fact is that U.S. supplies are five days away from Veneuzuela, whereas these other suppliers are several weeks away,” said Lipow. “The cost would increase.”

Venezuela’s oil production has already fallen as PDVSA struggles to fund investments, so any higher costs would only ratchet up the pressure. But market disruptions could raise crude prices and squeeze profit margins for Gulf Coast refiners, including those owned by top users of Venezuelan crude like Valero, Phillips 66, Chevron and the Venezuelan state-owned Citgo.

It could also make winners out of firms that operate tanker ships like Frontline and Nordic American, who would benefit from booking trips to Africa rather than the Gulf Coast, Lipow said. The United States shipped about 75,000 barrels a day of these petroleum products to Venezuela last year.

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