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$477 million worth of Venezuelan oil stuck at sea waiting for buyers

Photo: Zheltikov Dmitry / Shutterstock

PortandTerminal.com, February 27, 2019

HOUSTON/PUNTO FIJO – A fleet of 16 tankers holding 8.36 million barrels of Venezuelan crude are floating off the country’s coast as the nation scrambles to find buyers for its oil following new U.S. sanctions in January.  At today’s prices, that oil is worth $477 million dollars.

Last month, the Trump administration imposed wide-ranging sanctions on Venezuela’s oil sector. After a brief wind-down period, US companies will no longer be allowed to purchase oil or oil products from Venezuela. They are also immediately barred from selling any oil products, which are vital to maintain the country’s oil industry alive, to Venezuela.

With few buyers willing to take Venezuela’s oil, the alternative for them was to put some of that oil onto tankers to free up space and continue to operate at lower production rates. Meanwhile, they need to find buyers for almost half a billion dollars worth of oil.

The Wall Street Journal today reported that Venezuela, under the U.S. embargo, has shifted some of its crude exports from American refiners to India and Europe, according to the country’s oil minister and ship-tracking firms. But it will difficult for President Nicolás Maduro’s government to generate a profit from these sales and counter U.S. pressure, analysts said.

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