Venezuelan oil exports fall, politics threatens sanctions relief

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Following a six-month easing of sanctions by Washington on Venezuelan oil, the country’s oil exports fell for October, and signs of political interference are now threatening to reverse the sanctions deal.

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According to Reuters, Venezuela’s October exports dropped by 19% to fewer than 700,000 barrels per day in October, after exporting over 8210,000 bpd in September, based on data from state-run oil company PDVSA and tanker tracking. Internal politics now threatens to scupper the six-month temporary lifting of sanctions, with the Venezuelan Supreme Court earlier this week suspending the results of a primary vote to choose an opposition candidate for presidential elections. Washington lifted sanctions temporarily after the Venezuelan government and opposition agreed to a deal for an internationally monitored election to be held in 2024.   Just prior to the Supreme Court’s decision, Venezuelan President Nicolas Maduro had called the vote a “fraud”, according to Bloomberg. Washington is now closely watching what happens next.

In the meantime, the market is still waiting to see how long it might take for Venezuelan oil output to recover, with October in decline. Exports may get a boost from both India and China, who are on the hunt for cheaper oil while Russia defies the G7-imposed $60 price cap per barrel and the discount is dwindling.

In an exclusive report on Thursday, Reuters said PetroChina was proposing to buy up to 8 million barrels a month of Venezuelan crude from PDVSA, citing four unnamed sources, while India has also said it would consider buying Venezuelan crude if the price is right.

PetroChina is the second-largest oil refiner in China and has, according to Reuters, offered payment in yuan for around 265,000 barrels per day of Venezuelan crude. This cash could help PDVSA investment in further production.