Venezuela’s Oil Exports Surge Amid Chevron License Termination

(Reuters) – Venezuela’s crude and fuel exports have surged in February, reaching their highest levels since November, according to vessel monitoring data. This increase comes as the U.S. prepares to terminate a crucial license that permits oil giant Chevron to operate and ship crude from the South American nation.

Impact of Chevron’s License on Venezuela’s Oil Exports

Since Chevron was granted the license in late 2022, Venezuela’s oil output and exports have seen a significant uptick, providing a vital revenue stream for President Nicolas Maduro’s administration. In January, Chevron shipped over 30% of Venezuela’s total oil exports to the U.S., highlighting the company’s pivotal role in the country’s oil economy.

U.S. Treasury Department’s Decision

On Tuesday, the U.S. Treasury Department announced the wind-down of Chevron’s activities in Venezuela, effective within the next 30 days. This decision follows accusations from former President Trump, who claimed that Maduro has failed to make adequate progress on electoral reforms and the return of migrants.

Venezuela’s Export Statistics

In February, Venezuela’s state energy company PDVSA and its joint venture partners exported an average of 934,465 barrels per day (bpd) of crude and fuel. China continues to be the largest market for Venezuelan oil, receiving approximately 503,000 bpd. The U.S. follows as the second-largest receiver with 239,000 bpd, while Europe and India received 69,200 bpd and 68,000 bpd, respectively.

Decline in Chevron’s Exports

Chevron’s exports to the U.S. and other destinations from its joint ventures fell to 252,000 bpd in February, down from 294,000 bpd in January. Additionally, Venezuela exported 315,000 metric tons of oil byproducts and petrochemicals, including methanol and urea, which is a decrease from the 360,000 tons shipped in January.

Challenges Ahead for PDVSA

Since the U.S. first imposed oil sanctions on Venezuela in 2019, PDVSA has increasingly relied on lesser-known intermediaries that purchase its oil at discounted prices and then supply it to China. These intermediaries also impose costly fees for freight, ship-to-ship transfers, and discharge, further complicating Venezuela’s oil export landscape.

Future Outlook for Venezuelan Oil Exports

With the new license terms from the U.S. Treasury yet to be detailed, analysts predict that PDVSA will likely redirect more oil shipments to China through these intermediaries in the coming months. This shift could significantly impact U.S. refiners of heavy crude, particularly those located in the Gulf of Mexico, who are already facing challenges due to the withdrawal of Chevron’s license.

As the situation unfolds, the implications of the U.S. government’s actions on Venezuela’s oil exports and the broader geopolitical landscape remain to be seen. For more details, visit the original article.