All the very serious geopolitical implications aside, economically, a U.S. blockade of Venezuelan oil tankers couldn’t really come at a better time. Globally, there is a glut of crude oil — prices are low and over the years, the U.S. has mostly weaned itself off of Venezuelan oil because of production decreases and sanctions. But the U.S. oil industry still has some skin in the game when it comes to Venezuela. Gulf Coast refiners in particular.

Years before fracking, the U.S. looked to Latin America for oil, especially Venezuela and Mexico. The problem was their oil was heavier — syrupy.

“U.S. refiners invested about $100 billion from 1990 to 2010 to handle heavier crudes as global supply patterns changed because of the additional heavy crude that was coming from Venezuela and Mexico,” said Debnil Chowdhury with S&P Global Energy.

But that $100 billion bet didn’t go as planned. Gregory Brew with the Eurasia Group said in Hugo Chavez was elected president of Venezuela, and his administration took a more aggressive nationalist stance and seized assets from U.S. oil companies.

“[There’s also been] years of general mismanagement and technical inefficiencies on the side of Venezuelans,” Brew said.

And the U.S. imposed sanctions.

So, those Gulf Coast refineries made for Venezuelan oil, found themselves largely without. They’ve pivoted, but it’s still not an ideal match.

“Even though refineries have changed into processing much more light oil, they still are thirsty for heavy,” said Francisco Monaldi with Rice University.

So, if there is a regime change after all, the U.S. lifts sanctions and Venezuelan oil flows more freely to Gulf Coast refiners. 

“The Venezuelan barrels, I think, would slip right into our system very effectively,” said Dan Pickering with Pickering Energy Partners. “It would be a positive on the margin for U.S. gasoline consumers and the U.S. refining system.”

But regime change is a big if, so there’s another scenario to consider: a sustained blockade with large amounts of heavy Venezuelan crude taken out of the global market. In that case…

“Heavy crude pricing would get more expensive,” Chowdhury said.

Refineries would keep operating — but it could hurt their margins.