(Reuters, Marianna Parraga, 1.Aug.2019) — Venezuela’s oil exports fell 17.5% in July to their second-lowest level since Washington imposed sanctions on the nation as state-run PDVSA finds fewer customers to take its oil, according to internal data from the company and Refinitiv Eikon.
PDVSA and its partners exported a total of 932,887 barrels per day (bpd) of crude and refined products last month in 35 cargoes mostly sent to Asian destinations, compared with 40 cargoes shipped in June, the data showed.
The company in the second quarter began reshuffling its oil output to produce mainly Merey, a heavy crude grade preferred by Asian customers. At the same time, it suspended production of the upgraded oil that was typically purchased by U.S. refiners before the administration of U.S. President Donald Trump announced sanctions in late January.
That change in its output slate allowed Venezuela to boost exports in June after they fell in May to some 875,000 bpd, their lowest level of the year.
But PDVSA’s portfolio of customers has not stopped shrinking since the Washington sanctions banning U.S. companies from dealing with PDVSA and blocking transactions in dollars with the firm.
Power outages that hit the country in July also contributed to last month’s export decline, as they affected PDVSA’s production at its Western fields.
In July, PDVSA’s export programs showed only five companies directly taking Venezuelan oil compared with nine in February. Some shipments delivered to new customers in previous months, including a portion of cargoes taken by Turkish firm Iveex Insaat, were stuck in Venezuelan waters in July, waiting for authorization to set sail.
PDVSA did not immediately reply to a request for comment.
Fewer clients have meant more cargoes for PDVSA’s closest allies. Russia’s state-run energy company Rosneft took more than 46% of the country’s shipments last month with some 432,000 bpd of crude resold to final customers in Asia.
That is more than double the volume of Venezuelan oil Rosneft was taking when sanctions hit, according to agreements by the companies to settle oil-for-loan payments. Shipments to Rosneft are used as debt repayment by PDVSA.
Though exports to China remained high last month, representing 60% of Venezuela’s oil shipments, customers in India and Europe reduced their purchases of Venezuelan crude. Cuba, for its part, received 6% of exports in July, or nearly 57,500 bpd. (Reporting by Marianna Parraga in Mexico City Reporting by Matthew Lewis)