Bloomberg: PDVSA default would mean trouble for U.S. refiners’ oil supply

Oct 21 2016, 10:31 ET | By: Carl Surran, SA News Editor 

A potential default by Venezuela's PDVSA would cause trouble for U.S. Gulf coast refineries, as the country is the primary supplier of foreign oil to the region, Bloomberg reports.

PDVSA has been trying to persuade bondholders to exchange as much as $5.325B of outstanding notes maturing in 2017 for longer-term securities due in 2020, with the deadline for the swap due today after three extensions; the company says a failed bond exchange would make it difficult to make payments on its existing debt.

“If PDVSA defaults, there could be a disruption of oil supply to the U.S. as creditors may try to seize payments made in the U.S.,” a Fitch Ratings analyst says. “Bondholders will definitely try to stake a claim on those dollars.”

Phillips 66 (PSX -0.3%), Valero Energy (VLO +0.1%), PBF Energy (PBF +1%) and PDVSA subsidiary Citgo are among the largest buyers of heavy Venezuelan crude.