• 4 minutes U.S. Shale Output may Start Dropping Next Year
  • 8 minutes Read: OPEC WILL KILL US SHALE
  • 12 minutes Tidal Power Closer to Commercialisation
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 34 mins Trump to Make Allies Pay More to Host US Bases
  • 12 hours Why U.S. Growers Are Betting The Farm On Soybeans Amid China Trade War
  • 15 hours THE DEATH OF FOSSIL FUEL MARKETS
  • 8 hours Solar to Become World's Largest Power Source by 2050
  • 21 hours US-backed coup in Venezuela not so smooth
  • 23 hours Can OPEC CUT PRODUCTION FOREVER?
  • 20 hours Sounds Familiar: Netanyahu Tells Arab Citizens They’re Not Real Israelis
  • 2 days Will Trump Cave Again
  • 2 days European Parliament demands Nord-Stream-ii pipeline to be Stopped
  • 1 day War on Emissions Gains Traction
  • 13 hours Exxon Aims For $15-a-Barrel Costs In Giant Permian Operation
  • 2 hours Biomass, Ethanol No Longer Green
Are Oil Markets Too Tight For Trump?

Are Oil Markets Too Tight For Trump?

Oil prices may well be…

U.S. Oil Production Is Headed For A Quick Decline

U.S. Oil Production Is Headed For A Quick Decline

Several forecasters continue to raise…

Venezuela Oil Shipments To U.S. Fall By Half

PDVSA

Venezuelan oil shipments to the United States have fallen to just 56 percent of their 2016 average, cargo-tracking data from Bloomberg has revealed, as sanctions against Caracas hinder oil sales from PDVSA.

Washington imposed a round of sanctions against the Venezuelan government this August, including a ban on dealings in new debt or equity issued by state oil firm Petroleos de Venezuela SA (PDVSA) or the government. Ever since, U.S. refiners have found it increasingly difficult to secure the letters of intent that are traditionally used to pay for crude cargoes. U.S. banks are simply getting more and more reluctant to conduct any business that includes the Venezuelan state oil company.

What’s worse, though, is that the quality of Venezuelan crude sent north is becoming worse. According to Bloomberg, one U.S. refiner said it rejected a Venezuelan oil cargo because it was mixed with four times more water than the admissible amount. The water content of oil cargoes is monitored closely because water-laced oil can damage refining equipment.

It’s not just water, either. Earlier this week, Reuters reported that PDVSA oil shipments are “soiled with high levels of water, salt or metals that can cause problems for refineries”. The problem is the lack of cash. Without it, PDVSA has had trouble buying the chemicals to treat its oil, and has had trouble scraping together enough cash to pay for equipment and upkeep to maintain the oil’s quality. “We’re refitting chemical injection points, recouping pumps and storage tanks,” one PDVSA worker told Reuters. “But without chemicals, we can’t do anything.”

Related: Can Venezuela Avoid Default?

Venezuela is the third-largest oil exporter to the United States. For the week to October 13, imports from the country averaged 255,000 bpd, down from 466,000 bpd in the previous week and from 736,000 bpd a year earlier, the Energy Information Administration reported.

When the Trump administration first started mulling over sanctions against Venezuela, suspending imports from the troubled country was an option. It was never used, but apparently it didn’t need to, judging by these latest developments. That’s one more headache for Caracas, which must make more than $2 billion in bond payments over the next week—payments that it can’t miss because it could otherwise trip the wire to bondholders just waiting for a default.  

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Naomi on October 25 2017 said:
    PDVSA had an elite cadre of MIT and Harvard trained engineers. Maduro replaced them all with his bus driver friends.

Leave a comment

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