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U.S. Gasoline Prices Continue To Climb

U.S. Gasoline Prices Continue To Climb

Gasoline prices continue to climb…

Trader Trafigura To Stop Oil Business With Venezuela

Due to the U.S. sanctions on Venezuela’s oil industry and state firm PDVSA, one of the world’s largest commodity traders, Trafigura, has decided to halt its oil trade with Venezuela, Reuters reported on Friday, quoting a source with direct knowledge of the plans.

Trafigura walking out of oil trading with Venezuela would be a harsh blow to PDVSA, which has been working with Trafigura and other trading houses to sell crude oil and to import refined oil products.

In 2018, Trafigura directly lifted 34,000 bpd of crude oil and products from Venezuela, most of which it resold to refineries in the U.S. and China, according to internal documents of PDVSA which Reuters has seen.

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The U.S. sanctions now block all payments to PDVSA accounts, and buyers of Venezuelan crude are directed to deposit payments in a separate escrow account, to which PDVSA and the regime of Nicolas Maduro doesn’t have access.

Trafigura will stop trading with PDVSA after it completes a small number of trades that have already been concluded, according to Reuters’ source.

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Some ten days after the U.S. sanctions on Venezuela were imposed, trading houses were still unable to resell Venezuelan crude oil, Reuters reported last week, citing sources and shipping data.

Due to the harsh sanctions, end-users are reluctant to buy Venezuelan crude, and cargoes are being left stranded in the Atlantic basin, according to Refinitiv Eikon data. Trading houses in Europe, including Trafigura and Vitol, regularly offer Venezuelan crude to refiners, but now the commodity traders are finding it hard to find an end user willing to buy.

“No one who typically takes Venezuelan crude from us is lifting a single barrel,” a Trafigura trader told Reuters, commenting on the spot market of Venezuelan oil. “Buyers are not sure of the risks and how to ensure any payments are not remitted to PDVSA,” according to the trader.

Last week, Trafigura told Reuters that it was following “all applicable sanctions.”

By Tsvetana Paraskova for Oilprice.com

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