• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 15 minutes WTI @ 67.50, charts show $62.50 next
  • 12 hours The EU Loses The Principles On Which It Was Built
  • 3 hours Starvation, horror in Venezuela
  • 5 hours Saudi Fund Wants to Take Tesla Private?
  • 20 hours Crude Price going to $62.50
  • 7 hours Why hydrogen economics does not work
  • 4 hours Tesla Faces 3 Lawsuits Over “Funding Secured” Tweet
  • 4 hours Again Google: Brazil May Probe Google Over Its Cell Phone System
  • 2 days Anyone Worried About the Lira Dragging EVERYTHING Else Down?
  • 17 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 1 day Chinese EV Startup Nio Files for $1.8 billion IPO
  • 2 days Oil prices---Tug of War: Sanctions vs. Trade War
  • 2 days Correlation does not equal causation, but they do tend to tango on occasion
  • 2 days Russia retaliate: Our Response to U.S. Sanctions Will Be Precise And Painful
Oil Prices Hit 7-Week Low As Trade War Heats Up

Oil Prices Hit 7-Week Low As Trade War Heats Up

Oil prices traded close to…

Southern Company Just Raised Cost Estimates For This Megaproject Again

Southern Company Just Raised Cost Estimates For This Megaproject Again

Southern Company's subsidiary announced yet…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues

Venezuela

Venezuela’s Indian, Chinese, and American clients are complaining that crude shipments from PDVSA are poor in quality and are resulting in demands for discounts and returned shipments, according to a new report by Reuters, including interviews with over a dozen sources and supporting documents.

The disputes involve the contamination of crude with water, soil, and other minerals that make it difficult for refineries to effectively process crude for mass consumption. 

But the sources speculated that the low quality of shipments was due to lack of upkeep at PDVSA facilities as officials try to cut corners to save operating costs. In addition, the state-owned company lacks the resources to buy chemicals that aid in the long-term storage of crude before shipment. 

American refiner Phillips 66 has cancelled at least eight shipments totaling 4.4 million barrels in the first half of the year due to the low quality of crude coming in from Venezuela, official PDVSA documents show. 

The China National Petroleum Company (CNPC) complained this year that Venezuelan shipments had been excessively diluted with water, while India’s Reliance Industries complained of other quality issues, according to current and former PDVSA employees. 

“We’re refitting chemical injection points, recouping pumps and storage tanks,” one worker told Reuters. “But without chemicals, we can’t do anything.” 

Another employee indicated the deterioration of Venezuelan crude quality began as early as two years ago, but acute budget shortfalls in recent months accelerated the issues.

Related: How OPEC Continues To Cheat On Its Own Deal

PDVSA’s issues are twofold: logistical and political. In the U.S., Senators have been pressing the Trump Administration to review the chances of Russia’s Rosneft acquiring Venezuela’s PDVSA and its U.S. business, Citgo. Marco Rubio and Bob Menendez believe a change in the ownership of Citgo’s assets would constitute a security risk, Reuters reported last month.

The White House has already authorized sanctions against Caracas and PDVSA, based on the continuation of President Nichols Maduro’s regime despite severe protests by Venezuelans over the past year. 

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News