Venezuelan crude oil flows to India again: Trading firms and purchasers of Venezuelan crude have started hiring very large crude carriers to move oil from the South American country for the first time since a supply arrangement between Caracas and Washington came into effectThe move is expected to increase shipments to India, according to a Reuters report.
Before US sanctions were imposed in 2019, India was the third-largest importer of Venezuelan crude. Venezuela’s oil exports rose to about 800,000 barrels per day in January after US restrictions were lifted, compared with around 500,000 barrels per day in December.
Since January, most Venezuelan crude exports have been transported on medium-sized tankers such as Panamax and Aframax vessels, which typically carry between 450,000 and 700,000 barrels of heavy crude, largely destined for US refineries.
Some shipments have also been moved on Suezmax tankers, which can transport up to 1 million barrels, to storage terminals in the Caribbean, from where traders have shipped the oil onward to ports in the United States and Europe, according to vessel movement records.
Venezuela Looks To Boost Oil Exports To India
Large vehicles, each capable of carrying as much as 2 million barrels of crude, are likely to reduce freight costs for traders and buyers, ease the shortage of smaller vessels and quicken deliveries from next month. Faster shipments could also help draw down the large volumes of crude currently stored in Venezuela.
At least three very large crude carriers chartered by Vitol and Trafigura have been allotted loading schedules for March at Jose, Venezuela’s main crude export terminal. Operated by state energy company PDVSA, the facility handles as much as 70% of the country’s oil exports. The cargoes are expected to head to India, sources told Reuters.
Another supertanker, Olympic Lion, indicated Venezuela as its destination this week and is projected to reach the country in the latter part of March, according to LSEG ship-tracking data quoted in the report.
Moving crude in larger volumes could help trading firms lower expenses, particularly as some have argued that the roughly $15-per-barrel discount to Brent agreed last month for early purchases of Venezuela’s Merey heavy crude has become less appealing. This is partly due to the backward dated structure of the market, where cargoes scheduled for later delivery are priced lower than those available for immediate shipment.
According to shipping records and two sources, US oil company Chevron has sold Venezuelan crude cargo to
Reliance Industries for the first time since December 2023. The shipment consists of Boscan crude and is expected to be transported aboard the vessel Ottoman Sincerity. The deal represents the first sale of this heavy crude grade in nearly six years.
Sources told Reuters that Reliance has purchased a 2-million-barrel cargo from Vitol for loading in March and is exploring the possibility of sourcing crude directly from PDVSA.
Trading companies Vitol and Trafigura have been exporting Venezuelan crude this year under a $2-billion agreement between the United States and Venezuela. They have recently sold heavy Venezuelan crude cargoes to Indian refiners, including Indian Oil Corp, Bharat Petroleum Corp and
HPCL Mittal Energy, as India seeks to reduce its dependence on Russian oil, the report said.
Meanwhile, Chevron and several US-based refiners, including Valero Energy, Phillips 66 and Citgo Petroleum, are making preparations to increase the volume of Venezuelan crude processed at their facilities, a step that is expected to support higher export levels.
Two sources said Chevron and some US refiners have chartered dozens of Aframax and Panamax tankers, largely through time-charter arrangements tied to Venezuela. These agreements mean the vessels will be used exclusively to transport Venezuelan crude during the contract period.