Venezuela’s March oil exports slip amid struggles with returned cargoes
Venezuelan petroleum exports fell about 4% in March compared to the previous month as the country’s state-run oil company dealt with crude cargoes returned by customers due to poor oil quality, according to documents and vessel monitoring data.
A high-level meeting between US and Venezuelan officials in Caracas in early March opened the door to discussions about possible relief from sanctions imposed by Washington on the OPEC member’s oil industry since 2019.
This prospect has prompted Petroleos de Venezuela (PDVSA) and some foreign companies to take precautionary measures in anticipation of increased oil exports.
However, the export data revealed that PDVSA remains hampered by years of mismanagement and a lack of basic maintenance to key infrastructure for producing, upgrading, refining, storing, and exporting oil.
According to internal PDVSA documents and Refinitiv Eikon data, the state firm and its joint ventures shipped an average of 644,419 barrels per day (bpd) of crude and refined products in 23 cargoes, mostly to Asia, in March, slightly less than the previous month and less than the same month in 2021.
According to an internal document from the state company, at least one cargo of diluent fuel oil from the Petropiar production joint venture was returned to PDVSA after the customer reported it as “off specification.” Another cargo was returned in February for similar reasons.
PDVSA did not respond to a comment request.
Russia’s invasion of Ukraine and related sanctions, which are reshuffling global oil flows, have raised hopes for a return of Venezuelan output to its traditional markets, particularly the United States, after a three-year hiatus due to sanctions imposed on PDVSA.
Lower crude production allowed the company to drain a portion of its accumulated stocks in March, according to the data. The February data was reduced to account for a cargo that was loaded but did not sail that month.
PDVSA also attempted to restart its Petromongas crude upgrader, which is critical to converting its heavy crude to exportable grades, but it was still offline at the end of the month, according to the documents.
Mexico says government will respect fuel import permits for five foreign companies
Mexican President Andres Manuel Lopez Obrador said on Friday the government will respect fuel import permits for five foreign companies, a day after meeting with U.S. climate envoy John Kerry.
Permits would be respected for Exxon (XOM), Valero (VLO), Koch, Shell and Tesoro, Lopez Obrador said in a regular news conference.
Source: XglobalMarkets
