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Higher Oil Exports Insufficient To Cut Brimming Venezuelan Stocks

Venezuela saw its oil and oil products exports edge up in September from August, but these higher exports couldn’t drain Venezuela’s overflowing oil stockpiles which further increased last month, Reuters reported on Wednesday, quoting data from Refinitiv Eikon and state oil firm PDVSA.

According to the data compiled by Reuters, Venezuela’s exports of crude oil and refined oil products rose to 845,000 bpd in September, up from average exports of 770,000 bpd in August, which was the second-lowest monthly export figure so far this year.

Higher exports last month weren’t due to customers suddenly wanting to buy Venezuelan oil. The increased September exports of crude oil and refined products were chiefly due to more exports to Cuba and to the release of oil cargoes that had been sitting offshore Venezuela since the U.S. imposed sanctions on Nicolas Maduro’s regime in early 2019.

As if Venezuela’s oil industry is not in a bad enough place already, the country sitting on top of the world’s largest oil reserves is now forced to slow already low oil production and suspend some blending because its crude stocks are brimming as many customers and shipping companies bend to U.S. sanctions and avoid doing business with Venezuela.

The state oil firm PDVSA has had to recently cut back production and halt blending of the super heavy crude at some joint ventures with foreign oil firms, Reuters reported last month.

Due to the tightening U.S. sanctions, PDVSA’s list of clients has shrunk significantly, while shipping companies have become increasingly reluctant to supply Venezuela with vessels to ship its crude oil to foreign markets for fear of losing their insurance. Russia’s Rosneft has reportedly become the key middleman trader for Venezuelan oil in the world.

Even with tighter U.S. sanctions, Venezuela’s Maduro continues to ship oil to ally Cuba. In September, Venezuela’s exports to Cuba more than doubled to nearly 143,000 bpd, making Cuba the third-biggest buyer of Venezuelan oil, after China and Europe.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on October 02 2019 said:
    At least higher oil exports prove are that US sanctions against Venezuela are failing like those against Iran.

    Both Russia and China are ensuring that Venezuela's economy remains afloat with China helping Venezuela expand its crude oil and refined products production and Russia helping it sell its crude and get paid.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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