Reuters: U.S. sales of Venezuelan oil slow as refiners show little interest despite discounts

Venezuelan oil exports under the agreement with the United States are moving slowly, Reuters reported, citing ship-tracking data and documents from the state-owned oil company PDVSA.

The agency recalled that after the United States captured Venezuelan leader Nicolás Maduro, Caracas and Washington agreed to sell up to 50 million barrels of Venezuelan crude oil stored in tanks and on ships. Oil traders Vitol and Trafigura received the first U.S. licenses to load and export the oil.

As of January 21, Venezuelan oil exports under the deal had reached about 7.8 million barrels.

Following the end of the U.S. blockade of ships carrying Venezuelan oil, shipments have accelerated, but not enough for PDVSA to fully restore production after earlier cutbacks. As a result of the blockade, which lasted nearly a month, tens of millions of barrels accumulated in offshore tankers and onshore storage facilities in Venezuela.

Reuters sources said sales have been slow because refiners are unwilling to pay the prices set by traders.

For example, last week U.S. refiners were offered Venezuela’s flagship Merey crude at a discount of $6 to $7.50 per barrel below Brent. However, this was still more expensive than Canadian crude of similar quality, which is readily available, giving refiners little incentive to switch to Venezuelan oil.

Vitol and Trafigura also offered cargoes to Indian refiners at discounts of $8–8.50 per barrel below Brent, but these offers failed to generate interest. More recently, traders have increased discounts to around $9 per barrel, yet buyer interest remains limited, according to Reuters sources.

Crude oil production in Venezuela fell to about 880,000 barrels per day in early January from 1.16 million barrels per day at the end of November.

PDVSA sources said some oil fields have begun to resume production in recent days, but output in most areas remains below capacity.

• The United States is going to to sell Venezuelan oil "indefinitely"and the funds will be used "for the benefit of the Venezuelan people."
• President Trump signed an executive order to freezing of funds from the sale of Venezuelan oil the funds are held in the accounts of the U.S. Treasury Department.
• Minister of Finance Scott Bessent stated that the United States consider the possibility of partial withdrawal sanctions against Venezuela to facilitate oil exports and support the stabilization of the country's economy.