More than two-thirds of Venezuela's oil exports went to the US and India in July, leaving China in a distant third place, according to internal data from state-owned PdV obtained by Argus.
Oil exports, mostly crude with some fuel oil, totaled just over 43mn bl, equivalent to 1.389mn b/d in July. Crude accounts for "no more than 1mn b/d" of the total, with the balance comprised mainly of fuel oil, according to a PdV official familiar with the gross data. The overall export volumes and destination breakdown are similar to June, the official added.
At 1mn b/d, the crude exports leave around 250,000 b/d of the Opec country's declining production for PdV's refineries, a volume that is below 20pc of the company's domestic nameplate refining capacity, according to Argus estimates. But the crude export/production ratio may be distorted by imports of light crude, including domestic light sweet (DSW) from the US, and diluent in the form of naphtha, critical inputs that PdV is no longer able to fully satisfy on its own.
PdV itself accounted for roughly 650,000 b/d of the July crude exports, while its joint ventures with foreign partners, including US major Chevron, Russia's state-controlled Rosneft, Spain's Repsol, France's Total and Norway's Equinor, accounted for around 350,000 b/d.
The US market took 584,592 b/d or 42pc of the total July exports, followed by India with 367,795 b/d or 26pc. The next largest destination was China with 176,112 b/d or 13pc, followed by Cuba with 93,728 b/d or 7pc, the report indicates.
Smaller volumes went to Aruba, Curacao and other Dutch Caribbean destinations, as well as Germany, the Netherlands, Togo and Nicaragua.
The exports directed to India partly reflect PdV's oil-backed debt to Russia, which emerged as a significant patron of Caracas in 2016 with a $1.5bn loan from Rosneft that was collateralized with 49.9pc of the equity in PdV's US refining subsidiary Citgo. Last year Rosneft, trading firm Trafigura and Russia's UCP Investment paid $12.9bn for India's Essar Oil, since renamed Nayara Energy. The acquisition encompassed the 400,000 b/d Vadinar refinery, which includes a 7.5mn t/yr coker, around 4,500 fuel retail outlets in India and the 58mn t/yr Vadinar deepwater terminal. The refinery complex is equipped to process Venezuela's heavy grades such as Merey blend and diluted crude oil (DCO), a mix of Orinoco extra-heavy crude and naphtha, which is mostly imported. Another Indian buyer of Venezuelan crude is Reliance.
In the case of China, the volume of exports in July seems out of proportion to billions of dollars in oil-backed loans that Beijing has extended to Venezuela over the past decade, but the direct data probably underestimates the share of exports heading east. PdV routinely transships some of its exports through the Caribbean to Asian destinations. This logistical route to China and India has grown more complicated since May when US independent ConocoPhillips levied debt-related attachments on PdV´s assets in Curacao, Bonaire, Aruba and St Eustatius. The internal PdV data suggests that small volumes are still getting through.
Notably, the report confirms that Cuba, Venezuela's closest political ally, continues to receive a meaningful share of Venezuelan oil, even though some of it may be transshipped to other destinations out of the Matanzas terminal in light of the limits on Dutch Caribbean logistics. Under a controversial bilateral agreement signed in 2000, Havana pays for Venezuelan oil with the deployment of security and medical personal and advisers.
Another Venezuelan political ally and oil supply beneficiary, Nicaragua, has been rocked by political unrest since April.
