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Despite tightening U.S. sanctions, Venezuela’s PDVSA has managed to ramp up its oil exports this month, with the daily average hitting 325,000 barrels, which was the highest in four months, Bloomberg reports.
The increase comes thanks to diesel-for-crude swaps, Bloomberg notes, which are not covered by U.S. sanctions, at least for the time being.
Meanwhile, production has continued to fall, to a bit over 100,000 bpd, compared with some 2 million bpd Venezuela produced three years ago before the government in Caracas fell in the crosshairs of the Trump administration. For now, however, this low production rate does not affect exports because Venezuela has quite a bit of oil in storage, again thanks to the sanctions but also to the coronavirus pandemic that hit oil demand.
Interestingly, most of the higher Venezuela oil exports are going to India rather than its biggest buyer and creditor, China. China, according to the Bloomberg report, will only receive some 54,800 bpd of Venezuelan crude this month.
The diesel PDVSA receives in return will help the country alleviate a fuel shortage that has added to its already numerous problems. Iran, a fellow sanction target, earlier this year sent five tankers of gasoline in a bid to help Venezuela ease the shortage, but only one made it. The other four, U.S. officials told media this week, were seized by U.S. authorities.
The South American country that is home to the world’s largest oil reserves tried to tackle its shortage by restarting gasoline-producing units, but a refinery closure interfered with these plans. The El Palito refinery had to suspend operations over the weekend due to a technical problem. The facility was producing 20,000 bpd of gasoline before the outage. PDVSA has restarted two gasoline-producing facilities at two refineries and plans to restart a third one within two weeks.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.