U.S. Pressure on Venezuela Eases, Exports Inch Higher

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

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Summary

Sanctions pressure on Venezuela's interim president has eased. Meanwhile, the country's crude oil exports may be flirting with 1 million barrels per day.

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U.S. Imports Up 60% Year-over-Year

Some four months after U.S. military forces seized the Venezuelan president from his compound in Caracas, data show total imports of Venezuelan crude are up more than 60% from year-ago levels.

U.S. military forces captured former President Nicolas Maduro and his wife on January 3, ostensibly on drug charges. Since then, U.S. President Donald Trump has made it easier to do business in the Venezuelan energy sector.

"What we did in Venezuela was good for the world and good for our region in the Western Hemisphere," U.S. Secretary of State Marco Rubio said.

Shifting the narrative from illicit drugs to energy, the Trump administration has eased the pressure on Venezuela since Maduro's capture. On Wednesday, the U.S. Office of Foreign Assets Control, part of the Treasury Department, removed interim President Delcy Rodriguez from the Specially Designated Nationals list, allowing her to conduct business in the United States and with U.S. entities.

Venezuela sits on top of some of the largest oil deposits in the world, and its heavy grade of crude oil fits in a U.S. refinery sector tailored for those products. On Wednesday, the U.S. Energy Information Administration (EIA) reported that U.S. refineries took in an average of 349,000 barrels of oil per day (BBL/d) from Venezuela over the four-week period ending March 27. That's 61% higher than year-ago levels.

Refineries on the Mend?

By mid-March, Industrial Info reported that state-owned Petroleos de Venezuela, better known as PDVSA, had conducted partial repairs on a cracking unit at its Amuay refinery.

"The unit is expected to remain under repairs for a total of 41 days, with completion expected by mid-April," an alert to clients read.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can click here for the plant profile.

On Wednesday, the Reuters news service, citing unspecified shipping data, reported total exports from Venezuela passed 1 million BBL/d in March, the highest level since September.

Moving through trading houses such as Trafigura, sales were made to refiners in India, and other barrels went into storage. Reuters reported that March exports were 1.09 million BBL/d, carried onboard 60 vessels.

Exports in February were closer to 737,000 BBL/d, including fuels. Secondary sources reporting to economists at the Organization of the Petroleum Exporting Countries (OPEC) put Venezuela's total crude oil production at 903,000 BBL/d in February.

Venezuelan oil production peaked in the 1970s at about 3.5 million BBL/d.

Further support from the United States came in the form of diluting agents. Much of Venezuela's crude oil is too viscous to move through pipelines and products known as diluents are necessary to facilitate movements to export terminals and refinery centers.

In February, the U.S. Treasury Department issued licenses that authorized the sale of diluents to Venezuela. Despite the support, some U.S. energy executives have said the risk is too high to invest in Venezuela, questioning whether a potential future government -- either in the United States or Venezuela -- would honor Trump-era agreements.

By the Numbers

• 1.09 million BBL/d in March exports
• 903,000 BBL/d in February production

Key Takeaways

• Venezuela energy sector making progress.
• Sanctions pressures eased on interim President Rodriguez.

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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).