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Natural Gas Price Drop Could Spell Doom for Producers

Natural Gas Price Drop Could Spell Doom for Producers

American gas producers have been…

Cuba Receives Light Oil Shipments From Venezuela After Eight Months

Cuba received Venezuelan light oil for the first time in eight months in March, according to shipping documents from government-run PDVSA seen by Reuters.

The eight-month halt had caused Cuba’s Cienfuegos refinery to stop production due to lack of supplies. The Venezuelan company had scaled back export of its lighter grades to the Caribbean in order to use the fuel to dilute heavier grades.

Previously, PDVSA officials had rejected allegations that the Venezuelan state-owned oil firm plans to lower crude exports to Cuba, according to Xinhua, a Chinese news source. Instead, Caracas said production issues at Cienfuegos had been caused by other technical issues.

Cienfuegos is a Soviet-era refinery that had originally been built to process Russian crude. PDVSA later upgraded the facility to refine 65,000 barrels of Venezuelan crude a day.

Falling crude supply had left unfulfilled demand on the island nation, prompting PDVSA to restart exports of Mesa 30 crude to Cuba, according to a source that spoke to Reuters. In total, Havana received 1.39 million barrels of the light crude in March via three separate cargos.

Around 4 percent of Venezuelan oil exports were sent to Cuba before shipment had stopped, and the island is a member of the Petrocaribe alliance of nations receiving preferential terms for oil.

In March, Cuba also announced that it would will be cutting supplies of premium gasoline because of declines in imports from Venezuela. This put Cuba in a difficult position because Venezuelan fuel imports are subsidized, meaning alternative sources cost the cash-strapped government an arm-and-a-foot to secure.

Related: South Africa’s Huge Bet On Nuclear Energy

Although premium fuel is used by a minority of vehicles on the island – only those owned by diplomats and businessmen working in joint ventures, as well as state officials – a shortage is always bad news. The new Mesa 30 imports will go a long way in securing the supply of premium gasoline.

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By Zainab Calcuttawala for Oilprice.com

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