Venezuela's Oil Exports Surge 30% in May 2024 Amid Sanctions Resumption

Venezuela experienced a significant increase in its oil exports in May 2024, with a 30% rise compared to the previous month. This surge saw a total of 50 vessels departing Venezuelan waters, carrying an average of 708,900 barrels per day (bpd) of crude and fuel, alongside 614,000 tons of petrochemicals and oil byproducts.

Why this matters: Venezuela's increased oil exports have significant implications for the global energy market and international relations. This surge could impact oil prices, influence trade policies, and affect the country's economy and political stability.

The uptick in exports came as customers rushed to secure cargoes ahead of the resumption of U.S. sanctions on Venezuela. The U.S. Treasury Department had lifted these sanctions in April but announced their reimposition by the end of May. This prompted a flurry of activity among buyers eager to complete transactions before the deadline.

The U.S. Treasury Department has been issuing individual authorizations to energy firms conducting business with Venezuela. Companies such as Chevron, Maurel & Prom, Repsol, and BP have received these licenses, allowing them to continue transactions despite the broader sanctions.

Asia has emerged the largest destination for Venezuelan oil, with over a third of total exports (250,000 bpd) being shipped to the region. The United States followed, receiving an average of 205,000 bpd, primarily sent to Chevron's refineries. Europe received 129,000 bpd, while shipments to Cuba saw a significant increase, rising to 70,000 bpd from 23,000 bpd the previous month.

PDVSA, Venezuela's state oil company, saw its inventories of diluted crude oil rise to nearly 5 million barrels by the end of May. This increase followed the completion of maintenance work at some crude upgraders and more imports of diluents. Stocks of Merey 16, Venezuela's flagship crude, also recovered to almost 3 million barrels.

In addition to exporting oil, Venezuela imported 68,000 bpd of heavy naphtha and blendstock for producing gasoline, an increase from the 57,000 bpd imported in April. These imports are essential for maintaining the country's refining operations and gasoline production.

The broader context of this export surge includes Venezuela's ongoing efforts to circumvent U.S. sanctions, which have significantly impacted its oil industry. The country's reliance on individual licenses from the U.S. Treasury Department highlights the challenges it faces in maintaining its oil export levels.

Venezuela's oil exports saw a notable increase in May 2024, driven by a rush to complete transactions before the return of U.S. sanctions. Key destinations for these exports included Asia, the United States, and Cuba, with PDVSA managing to boost its inventories and maintain its refining operations through strategic imports.

Key Takeaways

• Venezuela's oil exports rise 30% in May 2024 to 708,900 bpd.
• Asia is the largest destination for Venezuelan oil, receiving 250,000 bpd.
• U.S. sanctions prompted a rush to complete transactions before the deadline.
• PDVSA's inventories of diluted crude oil rise to nearly 5 million barrels.
• Venezuela imports 68,000 bpd of heavy naphtha and blendstock for gasoline production.