Caracas, 13 January 2022 (TDI): Venezuela’s state-run oil company Petróleos de Venezuela, S.A. (PDVSA) will start exporting crude oil products again after a gap that lasted several months, according to a document obtained by Reuters.
In 2019, The United States enacted heavy sanctions on the country including trade sanctions on the PDVSA to pressure current President Nicolas Maduro to resign amidst rising tensions around the presidential crisis.
Venezuela’s extra-heavy oil needs to be diluted in order to be transportable and exportable. A lack of diluents, due to the sanctions has prevented this.
A recent deal with Iran has enabled the country to obtain 2.1 million barrels of condensate per month in exchange for supplying Iran’s national oil company (INOC) with 3.8 million barrels of Merey 16, Venezuela’s flagship crude oil.
This has allowed the country to build up a significant stock of DCO in offshore tanks which has forced the PDVSA to dedicate its already limited fleet to floating storage. Consequently, this has led the company to resume exports to Asia.
DCO, being an inferior quality crude oil with high amounts of water content and sediment means it is sold at a much lower cost. A supertanker has already been loaded with DCO, bound for Malaysia, according to an internal PDVSA schedule report.
The PDVSA document also shows that onshore DCO stocks stood at 4.27 million barrels at the end of December, up from 884,000 barrels in September. Last year the stock stood at 3.5 million barrels in the same time period.
The country has also increased the production of gasoline to nearly 160,000 barrels per day and around 38,000 barrels per day of diesel.
The export of DCO could alleviate problems in production and storage and transportation from the Orinoco, Venezuela’s largest crude oil production region, and allow for the renewal of the Venezuela-Iran swap. The swap was mostly complete last year before it had to be stopped in December.
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