Venezuela Exports Up 10% Year-Over-Year

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--The United States was the second-largest importer of Venezuelan crude oil last year, behind China, though the future may be uncertain amid political change and waning demand.

Various U.S. administrations have turned to sanctions on Venezuela in an effort to influence the political tide away from long-term President Nicolas Maduro. In the latest turn, outgoing U.S. President Joe Biden offered some options for exports to encourage a new round of elections, but the process was deemed exclusive and the administration offered only individual licenses for exports instead.

Under those licenses, Venezuelan crude oil exports increased 10.5% year-on-year to 2024, according to a Reuters report referencing third-party vessel and shipping data. And despite the U.S. opposition to Maduro, Reuters reported that exports to U.S. refineries, hungry for the heavy type of crude oil that Venezuela produces, averaged 220,000 barrels per day (BBL/d) last year.

More recently, those exports were closer to 520,000 BBL/d during the seven-day period ending December 13, according to data from the U.S. Energy Information Administration. That put the nation in the No. 8 spot for total crude oil exports to the U.S., ahead of Ecuador and Libya.

Crude oil exports in November were close to 1 million BBL/d for the first time since early 2020, but sloughed off considerably to around 756,000 BBL/d in December due to issues with refineries controlled by state-run Petróleos de Venezuela (PDVSA).

Sanctions have left much of the nation's energy infrastructure dilapidated. In November, PDVSA reported a fire at the operational center for the Soto Gas Pipeline in the eastern state of Monagas, considered something of a hub for the nation's energy sector given its proximity to the Orinoco oil belt.

According to the Organization of the Petroleum Exporting Countries (OPEC), of which Venezuela is a founding member, the appetite in Latin and South America in 2025 could be supported largely by oil demand from Brazil.

But it was China, the second-largest economy in the world behind the United States, that took the top spot in terms of Venezuelan crude oil imports. The Reuters report put the average at 351,000 BBL/d on average last year, though that marked an 18% decrease from 2023 levels.

China's economy has so far performed below post-pandemic expectations. In their monthly market report for December, OPEC economists forecast Chinese economic growth at 4.9% annually for 2024 and 4.7% for 2025.

The future of Venezuelan exports is unclear given that many of the licenses were allocated to Chevron Corporation (NYSE:CVX) (San Ramon, California), a U.S. supermajor with a heavy presence in the country. After the U.S. election in November, the Maduro administration welcomed the election of Donald Trump, though the incoming president may push hard for an energy independence agenda for his second term in office.

Venezuela relies heavily on hydroelectricity to keep the domestic power on, although its crumbling infrastructure leaves the grid unreliable. About 80% of its natural gas, meanwhile, is associated with oil reserves, and it is sometimes reinjected into oil fields to stimulate production. It is largely void of the infrastructure necessary for gas storage.

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