Oil tankers carrying at least 18.1 million barrels of Venezuelan oil are currently idling at sea across the world unable to find buyers - some for as long as six months - as many potential and previous customers of Venezuela's crude are not taking chances with delivery for fear of incurring secondary U.S. sanctions.
According to Reuters estimates based on shipping data, industry sources, and documents of Venezuela's state oil firm PDVSA, at least 16 tankers are idling off the coasts of Africa and Southeast Asia because few potential buyers would risk U.S. sanctions for dealing with the regime of Nicolas Maduro.
The 18.1 million barrels of still unsold Venezuelan crude oil is equal to two months of the country's production at its current rate, according to Reuters.
Over the past months, the U.S. Administration has increasingly stepped up its maximum pressure campaign on Venezuela and its oil industry and exports, seeking to cut off revenues for Maduro's regime.
Earlier this year, the United States slapped sanctions on Rosneft's Switzerland-based trading arm and signaled that it was ready to tighten even more the noose around the Venezuelan government.
Last week, the U.S. Department of the Treasury designated three individuals and eight foreign entities, and identified two vessels as blocked property for their activities in or associated with a network attempting to evade United States sanctions on Venezuela's oil sector. The sanctioned entities include Mexico-based Libre Abordo and its affiliate Schlager Business Group, the Treasury said.
Despite the U.S. sanctions, Venezuelan crude has still been reaching China in recent months.
According to the U.S. Administration, the tanker Delos Voyager - which is now a blocked property - loaded 515,000 barrels of Venezuelan crude in mid-January 2020 and delivered it to Qingdao, China, in February 2020, while EUROFORCE loaded 500,000 barrels of Venezuelan crude in mid-March 2020 and transferred the cargo to another vessel in the South China Sea in late May 2020.
By Tsvetana Paraskova for Oilprice.com
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Comments
Even Mexico has recently joined a widening circle of countries around the world ignoring US sanctions.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London.