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The Venezuelan loading delays helped push up Brent crude oil prices 2.6% to settle at $77.32 per barrel on Thursday.
The Venezuelan loading delays helped push up Brent crude oil prices 2.6% to settle at $77.32 per barrel on Thursday.

Venezuela Transfers Oil at Sea Despite Customer Qualms

Venezuela Transfers Oil at Sea Despite Customer Qualms

Venezuela has begun testing seaborne oil transfers to ease a severe backlog of crude deliveries from its main terminals, according to sources and data, as chronic delays and production declines could temporarily halt state-run PDVSA’s supply contracts if they are not cleared soon. The company has told some customers it may declare force majeure, allowing it to temporarily suspend export contracts, if they do not accept new delivery terms, including seaborne transfers, Reuters reported.

The delivery method entails specialized equipment and training, and higher costs for shipowners and customers. But PDVSA is pushing ahead over customer doubts, given the congestion at its ports and the need to complete sales that are the lifeblood of the OPEC member. Tankers waiting to load more than 24 million barrels of crude, almost as much as PDVSA shipped in April, are sitting off Jose, the country’s main oil port, according to the data.

PDVSA did not reply to requests for comment.

The delays helped push up Brent crude oil prices on Thursday. Brent rose 2.6% to settle at $77.32 per barrel.

The tanker Sonangol Kalandula, bound for a Thailand company’s refinery in Kemaman, Malaysia, was loaded this week with Venezuelan heavy crude using a ship-to-ship transfer, the first test of how PDVSA expects to ease congestion at its ports.

The vessel, which has not yet set sail, had been waiting since February to load, according to Thomson Reuters vessel tracking data. The cargo’s owner, Tipco Asphalt, did not reply to a request for comment. As of Thursday, more than 80 tankers were waiting in Venezuelan waters, half of them to load crude and refined products for exports. The delays have mounted since May, when asset seizures forced PDVSA to stop using Caribbean facilities for storing and loading export cargoes. But PDVSA’s noncompliance with oil supply contracts started months ago, as production declines accelerated.

 

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