Valero Energy Corp., the largest US refiner, said Wednesday it would close its refinery on the Caribbean island of Aruba indefinitely as poor economic conditions made the refinery unprofitable to run.

Texas-based Valero shut down the 275,000 barrel-per-day Aruba refinery, its third largest, in July temporarily after operating it at a loss in the second quarter. Executives hoped a halt in production at the refinery would allow the company to cut expenses until the petroleum industry improved. The company had said it would decide in August whether to reopen the refinery.

"Unfortunately, the difference in light crude price and that of sour crude has not increased and the product margins remain low, making the operation of this refinery unprofitable," the company said in a statement Wednesday.

Valero bought the Aruba refinery from Texas-based natural gas company, El Paso Corporation, in 2004, and has been seeking buyers since last year. Prior to the shutdown decision, the Aruba refinery had been hurt by poor product margins, said Valero spokesman Bill Day.

Valero, which operates 15 refineries in the United States and Canada, reported a net loss of 254 million US dollars, on revenues of 17.9 billion for the second quarter this year, versus net income of 734 million, on revenues of 36.6 billion, for the same period last year.