Venezuela’s Oil Exports Plunge By 38% From Three-Year High

• Venezuela’s oil exports plunged by 38% in August after hitting a three-year high a month earlier.
• Outages at two crude blending units prevented some of the extra heavy crude from being converted into exportable grades.
• With the U.S. currently considering additional special authorizations for oil companies in Venezuela, oil exports could soon climb again.

Venezuela’s oil shipments plummeted in August by 38% compared to the three-year high reached in July as state oil firm PDVSA was unable to maintain production at the upgraders that convert the extra heavy oil into grades suitable for shipping, Reuters reported on Monday, quoting PDVSA internal documents and tanker-tracking data.

Last month, Venezuela exported 544,000 barrels per day (bpd) of crude oil, down by 38% compared to over 877,000 bpd shipped in July, per LSEG Eikon vessel tracking data cited by Reuters.

In July, Venezuela’s oil exports were estimated to have surged to nearly three-and-a-half-year highs, thanks to increased shipments by Chevron and new supply contracts signed by PDVSA.

The latest data show that Chevron’s exports to U.S. refineries fell to around 147,000 bpd in August, down from 161,000 bpd in July.

The U.S. supermajor is the only Western major authorized by the U.S. to operate and export oil from Venezuela under a special license issued in November 2022.

Most of Venezuela’s exports in August were bound for China, according to the data Reuters has compiled.

But outages at two crude blending units at Petrosinovensa, jointly operated by PDVSA and China National Petroleum Corporation (CNPC), prevented some of the extra heavy crude from being converted into exportable grades in August. One of the upgraders resumed operations in the middle of August, according to an internal document of PDVSA seen by Reuters.

If issues at the upgraders are resolved, Venezuela could soon see another boost in oil exports. The Biden Administration has signaled it could be open to additional special authorizations for oil companies in Venezuela as it seeks to limit the fallout of a tight global supply on U.S. gasoline prices.

There could be an opening in the U.S. Administration to allow more companies – other than Chevron – to export crude oil from Venezuela.

Federal government officials in Washington are reportedly working on a draft proposal for sanctions relief to be offered to Venezuela if it organizes “free and fair” presidential elections.

By Tsvetana Paraskova for Oilprice.com

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