Valero Energy Corporation, the world's largest independent petroleum refiner and marketer, on Tuesday reported a surprisingly strong profit for the fourth quarter of 2012 as it swapped out foreign crude for cheaper domestic oil.

Profit of the Texas-based refinery operator in the October-December quarter jumped to 1.01 billion U.S. dollars from 45 million dollars a year earlier. Revenue was flat at 34.7 billion dollars.

The quarterly earnings are the highest since 2005, surpassing analysts' forecasts.

Valero in the fourth quarter replaced all imported light foreign crude with cheaper domestic crude at its Gulf Coast and Memphis refineries, Valero CEO Bill Klesse said in a statement.

The company is exploring ways to process more North American crude when it expects those lower-priced fuels to become increasingly available, said Klesse.

The International Energy Agency has predicted that U.S. oil output, aided by surging volume from shale and other onshore rock formations, could top production by Saudi Arabia and Russia by 2017.

Refiners fared better than any other energy sector in 2012 as U.S. crude production rose to the highest level since 1993, exceeding demand and keeping U.S. oil prices much lower than imports.