EIA estimates that Paraguay consumed 28,000 bbl/d in 2006, while Uruguay consumed 35,000 bbl/d. Neither country currently produces any crude oil. In February 2006, Paraguay’s Public Works Ministry announced that oil had been discovered in the western Chaco region by British oil company CDS, though CDS stated that the reservoir was too tight to facilitate unassisted oil production.

State-owned Petroleos Paraguayos (Petropar) has a monopoly on all crude oil and petroleum product sales and imports in Paraguay. It operates Paraguay's sole refinery, the 7,500-bbl/d Villa Elisa facility. Uruguay also has a single oil refinery, the 50,000-bbl/d La Teja facility, operated by state-owned Administracion Nacional de Combustibles Alcohol y Portland (ANCAP).

Like many oil-importing countries in the Western Hemisphere, Paraguay and Uruguay have tried to foster the development of special deals for importing crude oil and refined products from Venezuela. Both countries signed deals in 2005 to receive crude oil imports from Venezuela under preferential financing terms. In December 2005, ANCAP and PdVSA, the Venezuelan national oil company, agreed to fund a study for the proposed doubling of the capacity at the La Teja plant. The project, which would cost an estimated $800 million, would also upgrade facilities at the refinery so that it could handle heavier Venezuelan crude varieties.