Venezuela Exxon oil halt won't hurt U.S. supply

By Matthew Robinson - Analysis

NEW YORK (Reuters) - Venezuela's decision to cut off oil shipments to Exxon Mobil Corp as part of an escalating legal battle should have little impact on U.S. supplies or on the giant energy company.

The OPEC nation announced the embargo late Tuesday after the largest U.S. company won court orders to freeze $12 billion in Venezuelan assets as Exxon seeks compensation following the nationalization of an oil project last year.

But experts say Exxon Mobil should easily be able to find crude to make up the losses and said any oil denied the company will likely end up on U.S. shores anyway as the world's top consumer is by far the closest major market.

"This has very little impact on actual production. Crude stocks are high. Exxon can get their crude from almost anyone. What is Venezuela going to do?" said Kyle Cooper, Energy Futures Research, IAF Advisors in Houston, Texas.

Exxon imported about 90,000 barrels per day (bpd) of crude from Venezuela in November, excluding volumes shipped to the Chalmette refining joint venture with PDVSA, which appears to be exempt from the sales halt.

Analysts said PDVSA could be forced to sell the crude to third-party traders at a discount, who would then offer the crude to U.S. refiners -- including Exxon.

"If they have to sell to middlemen, Exxon may end up getting a sweeter deal -- even with the mark-up," said Rob Kurzatkowski, futures analyst with optionsXpress.

"I think this is more Chavez flexing his muscles and showing people he is tough."