A number of bullish factors…
China added some downward pressure…
Reliance Industries, the owner of the largest refinery in India and the world, has stopped buying Venezuelan crude, according to unnamed sources in the know who spoke to Bloomberg,
Last year, Reliance bought a quarter of the oil Venezuela exported, but the last time it bought Venezuelan crude this year was in March, Bloomberg reported, citing tanker data, and at a much lower rate than in 2019, at 117,650 bpd.
Reliance is not alone in shunning Venezuelan oil, fearing repercussions from Washington. India’s second-largest refiner, Nayara Energy, has also stopped buying Venezuelan crude, switching to Canadian, Kuwaiti, and Ecuadorian oil, again according to Bloomberg shipping data.
Meanwhile, 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.
The latest round of sanction action by Washington against Caracas was to blacklist five Iranian tanker captains and all tankers that have called at Venezuelan ports over the 12 months to June, making many oil traders reconsider their plans. According to shopping brokerage data cited by Reuters earlier this month, there were as many as 77 tankers that have called at Venezuelan ports over the past 12 months, which puts them at risk of being blacklisted.
Despite the sanctions, Venezuela is still exporting some oil, mostly to China. As of mid-June, according to shipping data, there were 3.3 million barrels of Venezuelan crude waiting to unload at Chinese ports and another 5 million barrels worth en route to the country.
Besides China, according to Bloomberg, Venezuela is exporting to Cuba, as well as Spain and Italy, but those shipments are to cover debt and do not generate income for the Maduro government, which is the purpose of U.S. sanctions.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.