In the wake of the U.S. easing of oil sanctions on Venezuela in October, trading houses that initially became purchasers of Venezuelan crude have transitioned to supplying the state-owned company PDVSA with motor fuels and diluents for heavy oil production, as revealed by documents and data.
As Venezuela gears up for a presidential election slated for late 2024, the nation has shifted its focus towards fuel imports to prevent a recurrence of the gasoline and diesel shortages that triggered protests in recent years, as per insiders and official documents. Washington, just two months ago, issued a six-month license that largely lifted sanctions on Venezuela’s oil industry, permitting the export of crude and gas to selected markets and the import of fuel from nearly any source. However, this authorization hinges on the condition that a free presidential election takes place.
PDVSA’s objective is to replenish its depleted inventories, which had necessitated routine imports and rendered the nation’s stocks susceptible to spikes in demand, sources revealed.
These new supplies complement prior oil swaps negotiated by PDVSA with certain joint venture partners, including major oil companies like Chevron, Eni, and Repsol, along with deals inked in recent years with partners such as Iran.
As of now, PDVSA and Venezuela’s oil ministry have not responded to requests for comment.
Over the past few years, Venezuelan motorists have intermittently faced gasoline and diesel shortages, even as subsidized prices have surged. In response to the scarcity of liquefied petroleum gas for cooking, households have had to turn to alternative energy sources.
In November, PDVSA imported an average of 54,000 barrels per day of heavy naphtha and gasoline blend stock, supplied by Chevron and Repsol. This marked the highest monthly figure since January. This volume excludes imports of light oil and condensate from Iran, which decreased in the latter half of the year, according to company documents and tanker tracking data from LSEG. For this month, a similar volume of heavy naphtha is scheduled to be received from Swiss-based trader Vitol, according to the documents, which also indicate that some negotiations involve cargo swaps.
Furthermore, Vitol has chartered a tanker to pick up a 1-million-barrel cargo of Venezuelan heavy crude in the latter half of December, according to data from LSEG.
Since October, Vitol and its rival Trafigura have been purchasing Venezuelan crude and fuel oil from intermediary firms. Most of these cargoes have been destined for China, although recent authorizations have allowed Eni and Chevron to supply Indian refiners, as indicated by documents and data.