According to oil traders and the media, Venezuela would be forced to send more of its crude oil to refineries in China, India or other Asian countries because of the potential U.S. sanctions on the crude oil exports of the country which is expected to cut off the country’s access to the refiners in the Gulf Coast which are the largest customers of Venezuelan crude.
On the other hand, there is likely to be even more problems for U.S. refineries because they crucially depend on huge supply crude oil supply from Venezuela and it would be difficult for them to source such huge quantities of crude from Canadian and Mexican because they most often do not carry discounts and are often limited in availability.
The Trump administration of the US is contemplating measures to hit the oil shipments from Venezuela. Crude oil exports are the major portion of the total exports of the South American country. The possible sanctions on oil shipments from Venezuela is being contemplated in response to the re-election of President Nicolas Maduro and the US considers the re-election, carried out late last year, to be a sham process.
In the latest move against Maduro, the US administration has announced its decision to recognize Venezuelan opposition leader Juan Guaido as Venezuela’s president amidst huge anti-Maduro protests throughout the country. And according to media reports quoting energy company sources, the Trump administration is also contemplating imposition of sanctions on oil deliveries. The US has so far restrained itself from imposing such sanctions.
According to U.S. Energy Department data, in 2018, on an average, about 500,000 barrels of crude a day was exported to the United States by Venezuela. But in recent years, the amount of shipments of crude from Venezuela to the US has come down and instead Russia and China are getting more of the shipments.
Most of those exports to Russia and China are being done as a part of the oil-for-debt repayment agreement that the Venezuelan government has struck with those countries in the wake of the very dramatic reduction in output by the state-run oil company Petróleos de Venezuela, S.A., also known as PDVSA. The company’s current production rate has touched 70-year lows because of a very crippling economic recession in the country. and according to figures from OPEC secondary sources, on the overall, there has been at nearly 50 per cent reduction in the total output of Venezuelan crude compared to production rates in 2016 at below 1.2 million bpd.
According to a media report quoting a one trader of Venezuelan crude, additional deals with Turkey, India or other Asian nations would be attempted by Venezuela in the face to US sanctions.
“It will be costly for Venezuela but eventually they’ll be able to sell that oil to Asia at a discount. There will be a period in the middle in which they have difficulty selling those barrels,” said Francisco Monaldi, fellow in Latin American Energy Policy at the Baker Institute for Public Policy at Rice University in Houston.
(Source:www.reuters.com)
On the other hand, there is likely to be even more problems for U.S. refineries because they crucially depend on huge supply crude oil supply from Venezuela and it would be difficult for them to source such huge quantities of crude from Canadian and Mexican because they most often do not carry discounts and are often limited in availability.
The Trump administration of the US is contemplating measures to hit the oil shipments from Venezuela. Crude oil exports are the major portion of the total exports of the South American country. The possible sanctions on oil shipments from Venezuela is being contemplated in response to the re-election of President Nicolas Maduro and the US considers the re-election, carried out late last year, to be a sham process.
In the latest move against Maduro, the US administration has announced its decision to recognize Venezuelan opposition leader Juan Guaido as Venezuela’s president amidst huge anti-Maduro protests throughout the country. And according to media reports quoting energy company sources, the Trump administration is also contemplating imposition of sanctions on oil deliveries. The US has so far restrained itself from imposing such sanctions.
According to U.S. Energy Department data, in 2018, on an average, about 500,000 barrels of crude a day was exported to the United States by Venezuela. But in recent years, the amount of shipments of crude from Venezuela to the US has come down and instead Russia and China are getting more of the shipments.
Most of those exports to Russia and China are being done as a part of the oil-for-debt repayment agreement that the Venezuelan government has struck with those countries in the wake of the very dramatic reduction in output by the state-run oil company Petróleos de Venezuela, S.A., also known as PDVSA. The company’s current production rate has touched 70-year lows because of a very crippling economic recession in the country. and according to figures from OPEC secondary sources, on the overall, there has been at nearly 50 per cent reduction in the total output of Venezuelan crude compared to production rates in 2016 at below 1.2 million bpd.
According to a media report quoting a one trader of Venezuelan crude, additional deals with Turkey, India or other Asian nations would be attempted by Venezuela in the face to US sanctions.
“It will be costly for Venezuela but eventually they’ll be able to sell that oil to Asia at a discount. There will be a period in the middle in which they have difficulty selling those barrels,” said Francisco Monaldi, fellow in Latin American Energy Policy at the Baker Institute for Public Policy at Rice University in Houston.
(Source:www.reuters.com)
