Thursday, June 8, 2023
  • Submit news
  • Contact
  • DMCA
  • Cookie Privacy
  • Privacy Policy
  • Terms of Use
Oil Market News
  • Home
  • Marketdaily
  • Price
  • crudenow
  • Companies
  • politics
  • Gas
  • investing
  • Stock
  • OPEChot
  • brend
  • ships
Oil Market News
Home Price

Are Venezuelan Oil Exports Poised For A Comeback?

1 year ago
in Price
Are Venezuelan Oil Exports Poised For A Comeback?
Share on FacebookShare on Twitter


As the international community seeks answers with regards to the failed armed incursion into Venezuela that took place May 4, allegedly with the immediate participation of former US military veterans, President Maduro has once again proved to be a masterful survival artist. Notwithstanding the umpteenth round of US Treasury sanctions, oil prices falling below breakeven level for Orinoco production and global demand shrinking, the failed plot allows the embattled leader to strike a national chord of national unity against the ever-aggressive enemy. More importantly, Venezuela’s exports to China seem to be picking up, giving a further twist to the troubled fate of Latin America’s most oil-prolific nation.

Even before the incursion, things were really intense in Venezuela. Former vice president Tareck El Aissami was appointed the new oil minister, a seemingly innocent piece of news, were it not for the fact that El Aissami has been investigated by the US Drug Enforcement Administration for money laundering and drug trafficking since at least 2015. El Aissami replaces General Manuel Quevedo, marking an end to his 3-year tenure which was generally perceived as the military taking over the oil industry (Quevedo was simultaneously oil minister and head of PDVSA). From now on, it is the intelligence agencies controlling the general oil policy whilst PDVSA will go to Asdrubal Chavez, Hugo Chavez’s cousin and former president of the US refiner Citgo.

Latest Oil News

Marathon Petroleum Corporation (NYSE:MPC) Q4 2022 Earnings Call Transcript

Marathon Petroleum Corporation (NYSE:MPC) Q4 2022 Earnings Call Transcript

February 1, 2023
Oil Under Pressure As API Reports Large Crude, Product Builds

Oil Under Pressure As API Reports Large Crude, Product Builds

January 31, 2023
African economies: How to respond to rising global crises

African economies: How to respond to rising global crises

January 30, 2023
Fuel prices to increase by 7%-13% from February 1, 2023 – IES

Fuel prices to increase by 7%-13% from February 1, 2023 – IES

January 29, 2023

Graph 1. Venezuelan Crude Exports in 2017-2020 (million barrels per day).

Source: Thomson Reuters.

The temporary loss of most Chinese demand and the concurring drop of oil prices below production costs (estimated to be in the $10-15 per barrel interval) have hit Venezuelan exports hard, however there are early indications of recovery being around the corner. After the US Treasury sanctioned the Swiss-based Rosneft Trading for conducting oil trade with the Venezuelan regime, no major oil company wished to fill in the void. As a consequence, Mexican companies previously unknown to the world of oil trading became leading exporters of Orinoco crude – firms like Libre Abordo and Richeart International are supplying water and water treatment equipment parts in exchange for crude, thus bypassing any need for dollar-denominated bank transactions. Related: Battery Metal Demand Set To Soar By 500%

As difficult as it is to follow a Venezuelan cargo en route to China – officially no tanker is declaring China as its discharge location, opting for the foggy concept of Singapore OPL (outer port limits) instead – VLCC movements from the José Terminal to Singapore indicate a potential increase in May-June. On the other hand, exports to India, having averaged 6-7 million barrels per month in Q1 2020, have decreased by almost two-thirds, attesting to the constraints the Indian downstream sector has been experiencing on the back of coronavirus paralyzing the South Asian nation’s economy. Yet with Chevron effectively banned from producing in Venezuela and Rosneft leaving the country’s upstream sector, too, PDVSA’s potential in terms of ramping up output is severely limited.

Cognizant of the challenges that an even lower production level entails, Venezuela has propped up its efforts to revamp the country’s decrepit downstream sector. Iran, Venezuela’s traditional peer as a target of US sanctions, has flown in several refinery parts as well as skilled specialists to effectuate the repair works in late April – a fact that was first discovered by media outlets noticing flights from Teheran directly to the Paraguana peninsula where the PDVSA’s CRP refining complex is located (nominal throughput capacity 940kbpd) and later confirmed by the new oil refining deputy minister Jorge Sicatt. It seems that PDVSA’s primary goal is to have both the Cardon and Amuay refinery’s fluid catalytic cracker repaired so as to provide a quick fix for the pervasive fuel shortages that have sparked public outrage.

There is good reason to invite Iranian downstream specialists to Venezuela as their refineries were also primarily configured for ExxonMobil and Shell technologies, however the dire condition of PDVSA refineries might be a tough nut to crack even for the most ingenious engineers. Not only were the incorrectly utilized FCC units fixed up from parts scrapped from elsewhere, only to be idled for too long afterwards, the task of repairing Amuay and Cardon is also compounded by the sheer size of the refining complex, the largest in the Western Hemisphere. Therefore, it would be somewhat too optimistic to expect any quick fixes with the downstream revamp – as demonstrated by a recent incident where 4 workers got burned whilst attempting to dismantle a furnace valve.

The coronavirus-triggered depression has compelled Maduro’s Administration to reverse one of its main economic policy moves of past years, namely the November 2018 lifting of price and foreign exchange controls. The Venezuelan government capped the prices of 27 staple foodstuffs, impacting all the leading agriculture and foods companies remaining in the country – from April 24 onwards these products will be under government-mandated quotas both in terms of scope and distribution. This might be due to President Maduro wanting to maintain the loyalty of the military echelons, all the while the fuel shortages and dearth of groceries increase the possibility of large-scale looting.

In an ideal world, Venezuela would now do its utmost to produce as much crude as it can, availing itself of the immense oil reserves it boats. Yet Caracas today is far from being in an ideal state and the COVID-19 pandemic has only underscored Venezuela’s fragility. PDVSA has embarked upon an array of genuinely necessary initiatives – the modernization of its refinery system, a flaunted reform to boost the role of private companies in the upstream sector – yet as long as the economy is daunted by hyperinflation, intermittent electricity access (a major factor in terms of damage done to refineries and crude upgraders) and military-sector interventions, President Maduro’s survival tactics continue to prevail over long-term recovery.

By Viktor Katona for Oilprice.com

More Top Reads From Oilprice.com:





oilprice.com

Tags: ChinaComebackEl AissamiExportsGeopoliticsMadurooilOil exportsOil MarketsPoisedVenezuelaVenezuelan
Previous Post

Vaccine euphoria, faith in OPEC driving prices; a cause for concern – Vitol

Next Post

Canadian Overseas Petroleum shares surge on ‘significant and impressive’ new

Related Posts

Marathon Petroleum Corporation (NYSE:MPC) Q4 2022 Earnings Call Transcript

Marathon Petroleum Corporation (NYSE:MPC) Q4 2022 Earnings Call Transcript

by Oil Market News
February 1, 2023
0

Marathon Petroleum Corporation (NYSE:MPC) Q4 2022 Earnings Call Transcript January 31, 2023Operator: Welcome to the MPC Fourth Quarter 2022 Earnings...

Oil Under Pressure As API Reports Large Crude, Product Builds

Oil Under Pressure As API Reports Large Crude, Product Builds

by Oil Market News
January 31, 2023
0

Crude oil inventories rose by another 6.33 million barrels last week, the American Petroleum Institute (API) data showed on Tuesday,...

African economies: How to respond to rising global crises

African economies: How to respond to rising global crises

by Oil Market News
January 30, 2023
0

Treasury CS Prof Njuguna Ndung'u. The Covid-19 pandemic triggered a profound setback after a quarter-century of economic and social progress....

Fuel prices to increase by 7%-13% from February 1, 2023 – IES

Fuel prices to increase by 7%-13% from February 1, 2023 – IES

by Oil Market News
January 29, 2023
0

The Institute for Energy Security (IES) is predicting between 7% and 13% jump in the prices of petrol, diesel and...

Why Germany Dragged Its Feet on Leopard Tanks to Ukraine

Why Germany Dragged Its Feet on Leopard Tanks to Ukraine

by Oil Market News
January 28, 2023
0

The decision to provide heavy tanks to Ukraine in significant numbers constitutes a step change in western military support for...

Indexes Rally and Notch Weekly Gains

Indexes Rally and Notch Weekly Gains

by Oil Market News
January 27, 2023
0

US stocks closed higher Friday after reversing early-session losses.  Easing inflation data added to investor optimism that the Federal Reserve...

Next Post
Crude Oil Shielded From Bond and Stock Market Rout

Canadian Overseas Petroleum shares surge on ‘significant and impressive’ new

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

Trend Oil News

Global stocks decline; oil extends gains

Global stocks decline; oil extends gains

1 year ago
Politics of semiconductors

Politics of semiconductors

10 months ago
Exxon plans January coker, crude unit work at Louisiana refinery -sources

Exxon plans January coker, crude unit work at Louisiana refinery -sources

10 months ago
Pioneer boss Scott Sheffield to retire from US shale group at end of 2023

Pioneer boss Scott Sheffield to retire from US shale group at end of 2023

1 month ago
Big Oil Stages a Big Comeback as Exxon’s Valuation Passes Tesla

Big Oil Stages a Big Comeback as Exxon’s Valuation Passes Tesla

6 months ago
ADVERTISEMENT
Canadian refiner Irving Oil explores options including sale

Canadian refiner Irving Oil explores options including sale

June 8, 2023

UK watchdog bans Shell, Repsol and Petronas greenwashing ads

June 7, 2023

Opec+ is not on board with Saudi’s ‘whatever it takes’ message

June 6, 2023

Saudi Arabia seeks to boost oil price with output cut of 1mn barrels a day

June 5, 2023

Opec bans prominent media groups from Vienna meeting

June 4, 2023

Saudi Arabia’s ‘prickly prince’ of oil bristles as crude price slides

June 3, 2023

Crude Oil

4 Days from Deadline, EU Fails To Agree On Russian Oil Products Price Cap

4 Days from Deadline, EU Fails To Agree On Russian Oil Products Price Cap

February 1, 2023
Oil rises after U.S. fuel stocks draw down; economic concerns loom

Oil prices settle steady on higher U.S. demand, weaker dollar

January 31, 2023
S&P 500 Down 1%; Crude Oil Drops Over 2%

S&P 500 Down 1%; Crude Oil Drops Over 2%

January 30, 2023
Russia Can’t Replace the Energy Market Putin Broke

Russia Can’t Replace the Energy Market Putin Broke

January 29, 2023

Investing

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

February 1, 2023
Crude Oil Shielded From Bond and Stock Market Rout

Clean-energy investing poised to top money backing oil and gas after hitting a record

January 31, 2023
Crude Oil Shielded From Bond and Stock Market Rout

The Cushing® MLP & Infrastructure Total Return Fund Announces Fund Name Change

January 30, 2023
Boeing’s 747, the original jumbo jet, prepares for final send-off By Reuters

Boeing’s 747, the original jumbo jet, prepares for final send-off By Reuters

January 29, 2023

Market

Canadian refiner Irving Oil explores options including sale

Canadian refiner Irving Oil explores options including sale

June 8, 2023
UK watchdog bans Shell, Repsol and Petronas greenwashing ads

UK watchdog bans Shell, Repsol and Petronas greenwashing ads

June 7, 2023
Opec+ is not on board with Saudi’s ‘whatever it takes’ message

Opec+ is not on board with Saudi’s ‘whatever it takes’ message

June 6, 2023
Saudi Arabia seeks to boost oil price with output cut of 1mn barrels a day

Saudi Arabia seeks to boost oil price with output cut of 1mn barrels a day

June 5, 2023

OPEC

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

February 1, 2023
‘OPEC does not control the price’: OPEC President | OPEC News

‘OPEC does not control the price’: OPEC President | OPEC News

January 31, 2023
OPEC+ Closely Watches Chinese Factory Data

OPEC+ Closely Watches Chinese Factory Data

January 30, 2023
Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

January 29, 2023
  • Submit news
  • Contact
  • DMCA
  • Cookie Privacy
  • Privacy Policy
  • Terms of Use

© 2022 OilMarket.News

No Result
View All Result
  • Home
  • Market
  • Price
  • crude
  • Companies
  • politics
  • Gas
  • investing
  • Stock
  • OPEC
  • brend
  • ships

© 2022 OilMarket.News

wpDiscuz
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.