Changing Trends in Venezuelan Flows

Share on twitter
Share on linkedin

As the US closes its doors to Venezuelan crude, we see more cargoes heading to Asia, with India as the primary destination amid talk of PdVSA seeking to barter for its oil.

Several vessels loaded with Venezuelan crude remain floating offshore Venezuela but signaling for the US – with PdVSA unwilling to deliver because US sanctions prevent it from getting paid.

Exports bound for India are above half a million barrels per day in February, the highest since mid-2016, while loadings bound for China are at their slowest monthly pace in at least five years:  

Screen Shot 2019-02-28 at 6.16.54 PM

US imports of Venezuelan crude averaged 500,000 bpd last year, before closing out January at 539,000 bpd. Sanctions were applied on January 28 and, as a result, imports have been cut in half this month.

Some 14 cargoes have discharged at six different delivery points. Only five of these cargoes were loaded after sanctions were applied, and none of them were loaded in Venezuela. They came instead from Caribbean terminals, and it is possible that the crude may have changed hands before sanctions were imposed. The drop in US imports is clear: 

US imports of Venezuela oil ClipperData

New call-to-action

Meanwhile, Venezuela’s imports of light distillates – which includes gasoline and diluents used domestically for both transportation and blending with heavy crude – have also been affected by the sanctions. The US was overwhelmingly the largest exporter of light distillates to Venezuela before this month. However, US exports to the South American country in February have been significantly reduced.

We have only registered 10 cargoes of light distillates to Venezuela this month, with two from the US: one delivery of alkylate, and one of MTBE. The significant reduction in imports of refined products is set to impact Venezuela’s crude exports because it requires diluents such as naphtha in order to transport its heavy crude.

Total Venezuelan crude exports in February are dropping below 1mn bpd, less than half the pace seen in 2014. 

Screen Shot 2019-02-28 at 11.01.19 AM