Citgo Petroleum Corp., one of the leading processors of heavy crude oil in the United States, is facing a critical moment following the U.S. attack on Venezuela that ended with the capture of former President Nicolás Maduro.
With refining capacity of about 749,000 barrels per day across three complexes in Lake Charles, Louisiana; Corpus Christi, Texas; and Lemont, Illinois, Citgo has historically been the main channel for processing extra-heavy crude from Venezuela’s Orinoco oil belt.
As noted, the refiner currently operates as Citgo Petroleum Corp. However, the key point is that historically, since 1990, Citgo has been wholly owned by PDV Holding Inc., a subsidiary of Venezuela’s state-owned oil company PDVSA.
Because of U.S. sanctions imposed since 2019 and a prolonged legal process linked to Venezuela’s debts and expropriations, PDVSA has neither controlled nor economically benefited from Citgo since that time.
In December 2025, a federal judge in Delaware approved the sale of PDV Holding’s shares, Citgo’s parent company, to Amber Energy, a subsidiary of hedge fund Elliott Investment Management, for about $5.9 billion.
The sale is intended to satisfy creditor claims totaling more than $20 billion.
In practice, the transaction has been approved but has not yet fully closed. It is expected to be completed in 2026, pending regulatory approvals, including authorization from the U.S. Treasury Department’s Office of Foreign Assets Control, and potential appeals.
Citgo’s technical profile
Citgo operates refineries specifically designed to handle heavy and sour crudes, such as Venezuela’s Merey, Hamaca and Boscán grades, which have API gravities of 8 to 16 degrees and high sulfur content of 2% to 3%. These facilities are equipped with advanced coking and desulfurization units, enabling the conversion of bitumen into products such as gasoline, diesel and fuel oil.
Citgo’s coking capacity, estimated at more than 200,000 barrels per day, is critical for processing these crudes, which require diluents, such as naphtha or condensates, to reduce viscosity before transport and refining. Until 2019, Citgo processed about 70% of Venezuelan crude exported to the United States, but sanctions forced the company to seek alternative supplies, including heavy crudes from Mexico and Canada.
Since 2019, an ad hoc board appointed by Venezuela’s opposition, which was recognized by the United States, has managed Citgo, severing its operational ties with PDVSA under the Maduro government. However, the parent company, PDV Holding, a Delaware entity, remained at the center of legal disputes over Venezuela’s debts exceeding $20 billion.
In December 2025, a court approved the sale of PDV Holding to Amber Energy, an affiliate of Elliott Investment Management, for $5.9 billion, although the transaction is still awaiting regulatory approvals and could face appeals.
Impact of the attack on Venezuela
The Jan. 3 military operation triggered concern across the energy sector. With Maduro captured and former President Donald Trump pledging to “manage” Venezuela during a transition, questions emerged about the future of the country’s oil infrastructure.
Production, already down to less than 700,000 barrels per day after years of underinvestment and sanctions, could fall further if fields are left without maintenance or if joint ventures, such as those between PDVSA and Chevron, are disrupted by a lack of diluents and continued trade restrictions.
For Citgo, this could mean an abrupt cutoff of Venezuelan crude supplies unless an interim government in Caracas, under U.S. oversight, rapidly restores operations. Citgo’s refineries, optimized for Venezuelan crude, face a technical challenge. Without diluents, they could operate at reduced capacity or require costly adjustments to process lighter crudes, such as WTI or Brent.
The shortage of diluents in Venezuela, exacerbated by export paralysis, deepens the problem, as Citgo previously relied on pre-diluted blends shipped from ports such as José.
Future scenarios
- Optimistic scenario: If a U.S.-backed interim government stabilizes PDVSA and resumes exports, Citgo could reclaim its role as a primary processor of Venezuelan crude. This would require massive investments, estimated at $10 billion to $15 billion over the next five years, to repair fields and pipelines, as well as secure diluents, potentially from Iran or Asian partners. Political transition risks and unresolved sanctions, however, could delay progress.
- Most likely scenario: Venezuelan production stagnates or falls below 500,000 barrels per day, forcing Citgo to further diversify suppliers. This would imply additional operating costs, up to 15% to 20% per barrel, to adapt refineries to less heavy crudes, squeezing profit margins. The sale to Amber Energy could be completed, but new owners would inherit a less valuable asset without guaranteed access to Venezuelan crude.
- Pessimistic scenario: A second attack signaled by Trump or prolonged internal resistance collapses Venezuela’s oil industry. Citgo, cut off from its historical feedstock, could lose further competitiveness, potentially facing bankruptcy or forced restructuring. This would push fuel prices higher in the United States and force rival refineries to absorb demand.
Citgo, a technical pillar in heavy crude refining, is at a crossroads. Its future will depend on political stability in Venezuela and on Washington’s ability to integrate the South American country’s oil industry into U.S. energy strategy. In the meantime, its refineries face technical and economic challenges that could redefine their role in the global market.
Merey 16 is Venezuela’s benchmark crude, a heavy and sour oil that accounts for the bulk of exports by state-owned Petróleos de Venezuela S.A. (PDVSA).
Produced mainly in the Orinoco Oil Belt, this grade is obtained by blending extra-heavy crude with lighter diluents, which facilitates transportation and refining. Since its inclusion in the OPEC basket in January 2009, Merey 16 has been an economic pillar for the country, though it faces significant challenges from international sanctions and volatility in global prices.
Its importance lies in its high production volumes and strong demand from refineries specialized in processing heavy crudes, particularly in Asia and parts of the Americas. This technical overview details its specifications, production process, history, pricing at the end of 2025, the impact of sanctions, comparisons with other heavy crudes and refining requirements.