Venezuelan Barrels Trickle in Amid U.S. Sale Claims

Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

Summary

The U.S. government claims it netted $500 million from the sale of Venezuelan crude oil. U.S. data show imports, however, are less than 100,000 barrels per day.

U.S. Claims First Sale of Venezuelan Crude Oil

The U.S. government said it made the first sale of Venezuelan crude after it captured the nation's president, though recent federal data show flows from South America had declined.

Various media outlets, citing sources in the federal government, said the first sale of Venezuelan crude oil netted $500 million. Using the OPEC basket of crude oils as a price reference, which was around $63.30 per barrel as of Thursday, that would equate to roughly 7.8 million barrels.

Few other global benchmarks were listed that high early Thursday, with the global benchmark Brent trading at around $63.75 per barrel. Terms of the sale were not available from news sources or the U.S. federal government.

U.S. President Donald Trump last week claimed that a formal deal brokered with "interim" authorities in Venezuela resulted in the handover of its crude oil. Few other details were available, however, apart from an announcement on social media.

Trump later said that he was the interim president of the South American nation, which sits on the largest oil deposits in the world. The administration said it plans to sell between 30 million and 50 million barrels of oil held in storage.

Sketchy Details

It's unclear if the Venezuelan barrels were physically sold on the market yet. Public data on vessel locations show few, if any, crude oil tankers headed for U.S. waters. It's also unclear what authority the U.S. has to sell another nation's resources.

White House Deputy Chief of Staff Stephen Miller, however, said it's the U.S. government, not Venezuela's, that controls oil flows.

"We have a complete embargo on all of their oil and their ability to do commerce," he told cable broadcaster CNN last week. "So for them to do commerce, they need our permission."

Earlier this week, IIR Energy Intelligence reported that Houston, Texas-based supermajors Chevron Corporation and Exxon Mobil Corporation were carving out a niche for Venezuelan crude oil in their Gulf Coast refineries.

Chevron is the only U.S. firm licensed to operate in Venezuela. Trump had suggested that ExxonMobil may not be playing a role after the company's chief executive said Venezuela was "un-investable." TotalEnergies' (Courbevoie, France) chief executive later added his voice to those skeptical of Trump's ambitions to overhaul the Venezuelan energy sector.

TotalEnergies' Patrick Pouyanne said it would likely take years of involvement and billions of dollars in investments to revive the nation's oil sector. Industrial Info's Global Market Intelligence (GMI) is tracking Venezuelan oil and gas facilities, petroleum refining facilities, and other petroleum investments that have reached a total of only $205 million.

Storage levels in Venezuela may be far below what the Trump administration claims as well.

The U.S. refining sector, meanwhile, is tailored to run the heavier types of crude oil from nations such as Venezuela.

Flows had continued even as Trump ramped up the pressure on Venezuela last year. U.S. federal data, however, show Venezuelan oil deliveries to the U.S. are on the decline.

The U.S. Energy Information Administration, part of the Department of Energy, reported Wednesday that U.S. refiners imported 72,000 barrels per day (BBL/d) of Venezuelan crude oil over the seven-day period ending January 9. That compares to a four-week moving average of 115,000 BBL/d, some 52% below levels from the same period last year.

By the Numbers

• $500 million in Venezuelan crude oil sales
• 50 million in storage, White House states
• 75,000 BBL/d in weekly imports of Venezuelan crude

Key Takeaways

• Venezuelan oil trickling into United States.
• Questions remain over U.S claims on sector revival.
• U.S. refiners are tailored to run heavy crude slates such a Venezuelan Merey grade.

About IIR News Intelligence

IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).