India Resumes Crude Oil Imports From Venezuela After 3 Years As U.S Sanctions Loosen

Following lifting of US sanctions on Venezuela, Indian refiners have begun purchasing Venezuelan oil via intermediaries. Reliance is expected to meet officials from PDVSA next week to talk about direct sales.

Trade restarted between the OPEC producer and the second largest buyer of its oil when Washington temporarily eased sanctions prohibiting Venezuelan oil shipments in October, resulting in a rush of spot sales of petroleum and fuel to China via intermediaries and dealers. However, Venezuela’s oil output has been erratic, restricting what it can export.

Venezuelan crude was last imported into India in 2020. Access to Venezuelan heavy oil might help India, a key Russian oil consumer, reduce its Reliance on the Middle East.

Three refiners from India have purchased approximately 4 million barrels of Venezuela’s crude oil for February delivery for $7.50 to $8 per barrel less than dated Brent on a supplied ex-ship basis, according to five trade insiders.

They stated that Vitol, a trading house, sold 500,000 barrels of oil to HPCL-Mittal Energy (HMEL), a JV between the state-run Hindustan Petroleum Corporation and Mittal Energy Investment. It also sold 1.5 million barrels to Indian Oil Corp.

Another source claimed Reliance had earlier received an offer for a prompt shipment at $16 a barrel under-dated Brent on a free-on-board base, but it was unclear whether the sale had gone through.

The South American country now produces approximately 850,000 barrels of petroleum per day (bpd), eventually reaching 1 million bpd.

Reliance was previously PDVSA’s second-biggest crude customer and a major fuel provider to Venezuela.

The Reliance group has scheduled discussions with PDVSA officials in Caracas, one of the sources said, adding that the talks are expected to cover crude sales to India as well as imports of fuel for Venezuela.

PDVSA, IOC, Reliance, Vitol, and HPCL-Mittal Energy did not respond immediately to the need for comment.

The Venezuelan firm continues negotiating crude sales to PetroChina independently, but no agreement has been reached.

ON THE WAY

No cargoes have yet arrived in India, but some boats completed loading in late November and are anticipated to sail in December, per tanker monitoring data and shipping timetables.

Taking cargoes will primarily depend on the purchasers’ ability to charter tankers willing to be loaded at Venezuelan ports, wherein bottlenecks and quality difficulties are prevalent, as well as their readiness to pay upfront, as required by PDVSA, according to some sources.

Some buyers have expressed concern about PDVSA’s use of trading houses and intermediaries to arrange oil sales to Asian refiners. Customers, especially China’s independent refiners, have recently delayed fresh orders due to price disagreements.

Reference: The Print

India Resumes Crude Oil Imports From Venezuela After 3 Years As U.S Sanctions Loosen appeared first on Marine Insight – The Maritime Industry Guide

Source: Maritime Shipping News