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Venezuela's crude oil exports continued to fall in August,
estimatations suggest they have reached their lowest level this
year. China increased imports last month, but shipments decreased
as purchases have been recently halted due to tougher US sanctions.
Venezuela's total exports of crude oil marginally surpassed 600,000
b/d, with another 170,000 of oil products estimated to have been
shipped from the Latin country last month.
Some Chinese buyers, including state-run CNPC, have been
cancelling shipments of Venezuelan barrels previously scheduled for
August, due to Washington warning that property of foreign
companies in the US could be frozen if they do more business with
PDVSA. Venezuela has been delivering oil to Chinese firms to repay
loans, worth billions of dollars.
Meanwhile, the share of Russia's Rosneft in Venezuelan oil has
been strengthening, with China typically importing these barrels.
Almost two thirds of total exports were lifted by Rosneft in
August, much higher than the activity observed in July. Barrels
identified by IHS Markit Commodities at Sea
exceeded 13 million last month. Transactions between the two
companies are done in Euros, as repayment of debt owed to Rosneft
for loans over previous years. Outstanding debt to Rosneft dropped
by USD 400 million in Q2 2019, having reached USD 1.1 billion.
Some European countries still import a small volume of
Venezuelan barrels as well, with Spanish oil firm Repsol continuing
to swap refined products for crude. Meanwhile, Venezuela has been
exporting around 35,000 b/d of crude oil to the Caribbean Islands,
primarily Cuba. Shipments to India recently reduced sharply, while
August imports still stood close to 250,000 b/d. However, this
number is set to decline in September.
Chinese imports of Venezuelan crude oil increased last month,
having surpassed 250,000 b/d, but this trend might not last for
much longer, even after the recent news that China plans to support
the Latin American producer in increasing production by expanding
output in the Orinoco belt. However, with Rosneft continuing to
take care of shipping and marketing operations for Venezuelan oil
exports, even if trading houses such as Trafigura and Vitol have
stepped away, flows to China and India will proceed, including
movements on vessels not sending a signal, as happened during the
last couple of months.
Posted 10 September 2019 by Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade
