By Georgina McCartney and Seher Dareen
HOUSTON/LONDON, Jan 13 (Reuters) - The discount on U.S. crude futures to the global benchmark Brent has grown by around $1 per barrel since the U.S. ousted Venezuelan President Nicolas Maduro on January 3 and took control of the South American country's oil flows, redirecting millions of those barrels to U.S. ports in a move likely to boost U.S. crude exports in the coming months, traders and analysts said.
U.S. crude futures were trading at a $4.76 a barrel discount
to Brent futures on Tuesday, their largest since April, according to LSEG data. Investors said the prospect of more U.S.-bound Venezuelan barrels was widening that spread and creating an open arbitrage window for traders, as shipping economics to Europe and Asia strengthen.
Up to 50 million barrels of Venezuelan crude are set to enter the U.S. market after U.S. forces captured Maduro and Washington struck an agreement with the interim government in Caracas in the following days.
The WTI-Brent spread widened by 21% last week, the largest weekly change since June 2025. Traders typically seek a $4 discount for U.S. crude futures versus Brent to reap a profit for their exports that factors in costs such as shipping U.S. crude across the Atlantic.
The U.S. exported an average of 3.7 million barrels per day of crude in December, according to ship tracking firm Kpler. Higher flows from Venezuela could lift U.S. exports by a further 100,000 bpd in the first three months of this year, Matt Smith, lead oil analyst at Kpler, said. U.S. exports hit a record high of 4.47 million bpd in March 2023, according to Kpler, and the WTI discount was around $6.50 when those deals were made.
BRENT OUTPACES WTI
The spread between WTI and Brent has widened for seven straight trading sessions since January 5. Escalating tensions in Iran are boosting Brent faster than WTI, with Venezuelan cargoes set to start loading this week for the U.S., curbing U.S. crude futures' gains on expectations of ample supplies.
"A heavier U.S. crude diet would push more domestic WTI barrels into export markets," said Dylan White, director of North American crude markets at consultancy Wood Mackenzie. "Relative WTI prices are expected to discount more steeply as additional exports clear into an oversupplied global market."
The WTI-Brent spread will ultimately depend on how much Venezuelan crude enters the U.S. and replaces U.S. oil that would otherwise be refined locally, a freight trader who was not authorized to speak publicly said. If a bigger U.S. surplus is created, those barrels will likely move to Europe or further east, the trader said.
North Sea Forties crude, part of the Dated Brent basket used to evaluate the spot price for physical, light North Sea crude oil, was priced at a $1.30 a barrel premium to WTI Aframax cargoes in Europe for early March, analysts at Sparta Commodities said, adding that such a spread is rarely sustained for long.
Brent crude oil's premium to Middle East benchmark Dubai rose on Tuesday to its highest since July, LSEG data showed.
"If China steps back in to buy and Iranian crude is unavailable due to either a blockade or the new sanctions, then any substitute buying in Middle Eastern grades will be more felt in Brent rather than WTI," said John Evans, analyst at PVM Oil Associates.
(Reporting by Georgina McCartney in Houston, Seher Dareen in London; Editing by Liz Hampton, Rod Nickel)
