Americas have glut of heavy oil due to freight squeeze; Asia, Europe scramble for barrels

Heavy crude, favored by oil refineries for its low cost, is accumulating in the Americas due to limited exports caused by soaring freight rates. US refiners are nearly at capacity and struggle to process the denser crude. Asia and Europe face supply shortages, with benchmark prices surpassing $100 a barrel. Venezuela, the US and Canada produce more oil than they consume, relying on exports to Asia to balance their markets.

Gulf Coast refiners have reached their processing limits, and the cost of shipping from the Americas to Asia has quadrupled since February. Venezuelan crude is trading around $74.50 a barrel, while shipping costs to Europe and Asia have surged, causing heavy crude storage builds in the Americas.