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US argues against Citgo sale: Update

  • : Crude oil, Oil products
  • 20/07/17

Adds detail from hearing.

Advancing the sale of Venezuela's US refining subsidiary Citgo could damage US foreign policy goals and that country's struggling opposition beyond repair, President Donald Trump's administration wrote in an 11th-hour filing ahead of today's oral arguments on the refiner's future.

Letters from the US Treasury's Office of Foreign Assets Control (OFAC) and US Special Representative for Venezuela Elliott Abrams argued that establishing a process to satisfy an international arbitration award with shares of the roughly 770,000 b/d refining business would only complicate US strategy there.

Moving forward with efforts by defunct Canadian mining firm and arbitration winner Crystallex would instead damage Venezuelan support for the US-recognized opposition working to remove President Nicolas Maduro from power, Abrams wrote.

"Every Venezuelan knows of this company and it is viewed, as are Venezuela's oil reserves, as a central piece of the national patrimony," Abrams wrote. "The impact on [US-recognized interim president Juan] Guaido, the interim government and US foreign policy goals in Venezuela would be greatly damaging and perhaps beyond recuperation."

Abrams supported Guaido's arguments that his US-recognized leadership should dissolve a 2018 ruling exposing Citgo to the billions of dollars sought by Venezuela's creditors. And OFAC denied Crystallex arguments that determining how to proceed with a sale would help the office decide whether to grant the company a license to execute it.

Opposition leaders have long hoped for executive branch assistance in the US District of Delaware case that has come perilously close to ending Venezuelan control of one of its most valuable overseas assets. Yesterday's late filing arrived more than seven months after an initial invitation from the court to respond, two months after another solicitation of executive interest and less than 15 hours before today's teleconference on whether to develop sale proceedings on shares of Citgo to help satisfy a $1.4bn arbitration award.

"The US sincerely apologizes to the court and the parties for any inconvenience caused by filing so close to the hearing date," the Justice Department said.

US attorneys participated in the hearing but did not expand on letters filed last night.

US support of Guaido is not news to the court, which accepted the opposition leader's representatives on behalf of Venezuela soon after the executive branch recognized him as interim president in January 2019. Guaido's appointed ad hoc boards represent Citgo and Venezuelan national oil firm PdV in US courts.

His representatives argued unsuccessfully against a sale in appeals last summer before the US 3rd Circuit Court of Appeals, and failed to attract consideration from the US Supreme Court this year.

But the opposition government can still persuade the US District Court of Delaware that circumstances have changed enough to remove a ruling argued in 2018 by Maduro representatives.

The court at that time determined that Maduro's government had so closely controlled Citgo that it functioned as an alter ego of the state. The decision pierced the corporate legal structure that normally protects such companies in the US from that exposure. Crystallex, now controlled by New York hedge fund Tenor Management, could seek shares of Citgo's holding company to satisfy an international award for mining interests expropriated under former president Hugo Chavez in 2011.

Has Venezuela changed?

The case proceeded on two tracks this summer.

The first considers whether circumstances have changed enough, as Guaido argues, to throw out the 2018 ruling. Though Venezuela has lost appeals of that decision, the judge could determine that enough has changed in Citgo's circumstances, as argued by Abrams, to render the original, proper decision now moot. US judge Leonard Stark asked why the case should go forward given the consequences that the government warned.

"It is not a malefactor cleaning up its act — it is a new sheriff in town," Venezuelan counsel Donald Virrelli said. "It is a new sovereign government asserting authority at considerable risk to its leaders in order to rescue the country from disaster and restore the rule of law."

Crystallex has pointed to the Guaido government's lack of control over any Venezuelan institutions outside the US. The opposition has no access to Citgo's revenue and cannot ship its gasoline to Venezuela because of US sanctions. The court must follow Trump's recognition of the Guaido government as the accepted representatives of Venezuela. But the court did not need to also ignore the reality of the opposition control, or further delay Crystallex's certified award to hope for conditions to change, Crystallex attorney Miguel Estrada said.

"Mr. Abrams may care intensely for the new, fledgling regime in Venezuela," Estrada said. "That is not a legal argument."

US judge Leonard Stark questioned arguments by Citgo and Venezuelan national oil company PdV that the companies were not in possession of the shares Crystallex sought and that arguments should shift to state law considerations. The attorney agreed with Stark that the parties had previously made the court aware that the "illegal Maduro regime" could have the shares in their possession, because they had not received any clear answers until Guaido appointed a new board.

"Why should Crystallex and the court have any confidence, based on the arguments you are making, that these shares are not really attached and are going to be transacted?" Stark asked.

How to sell

The second track would determine the appropriate way to sell shares of Citgo to satisfy the roughly $1bn remaining to be paid on the award. The court will address this at a future hearing after major disruptions from uncontrolled hold music halted the nearly three-hour proceeding twice.

Crystallex has sought a straightforward auction under Delaware law. Venezuela, Citgo and other creditors, including ConocoPhillips, have said such a proceeding could undervalue the refiner — leaving nothing left after satisfying the Crystallex debt. ConocoPhillips proposed a receivership, similar to US bankruptcy. Venezuela argues that if a sale must proceed, it should be carried out by PdV to ensure the highest possible value.

"Crystallex has no incentive to minimize the number of shares sold or respect the due process rights of others, including PdV," the national oil company said.

Such a sale would leave the legitimacy of the opposition government "severely eroded" if it took place with Maduro still in power, Abrams warned.

"Should these assets be advertised for public auction at this time, the Venezuelan people would seriously question the interim government ability to protect the nation's assets, thereby weakening it and US policy in Venezuela today," Abrams said.

Maduro has meanwhile moved to clip Guaido's remaining influence in Venezuela. Guaido's claim as interim president, recognized by dozens of western governments, relies on his leadership of the National Assembly. Venezuela's supreme court ratified a rival leadership in May, and a new Maduro-aligned electoral board was appointed last month. Opposition leaders have not decided whether to recognize or participate in elections under those circumstances later this year.


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25/02/10

Nigeria Dangote targets full capacity within a month

Nigeria Dangote targets full capacity within a month

London, 10 February (Argus) — Nigeria's privately-owned 650,000 b/d Dangote refinery could reach maximum operating capacity within a month, according to sources with knowledge of the matter who said the plant touched 85pc of nameplate capacity at the end of January. The stated goal appears ambitious, with data from Kpler and Vortexa showing Dangote ran at an implied range of 395,000-430,000 b/d to date this month, which is between 61-66pc of capacity. The implied range was 350,000-400,000 b/d in January, or 54-62pc operating capacity. Argus pegged Dangote's crude receipts at 405,000 b/d in January, a record. Dangote runs may be boosted by upstream regulator NUPRC's decision in early February to ensure Nigeria's crude is supplied to meet domestic refinery demand, before it issues crude export permits. Routine maintenance at state-owned NNPC's 125,000 b/d Warri refinery could have made more domestic crude available for Dangote use. Crude allocations to Warri were cancelled and offered out to the wider market last week, according to a market participant. But this would have been a short-term measure, with a source saying the work at Warri was completed as of 9 February, and around 1.15mn bl of crude are scheduled to be pumped to the plant. Downstream regulator NMDPRA projected that Dangote will require 550,000 b/d of Nigerian crude grades for the period January–June 2025, while NNPC's 210,000 b/d Port Harcourt and 125,000 b/d Warri plants will require 60,000 b/d and 75,000 b/d, respectively. Nigeria produced 1.51mn b/d of crude in January, according to Argus' estimate. Warri restarted at the end of 2024, having been offline since 2019. Diesel loadings from the refinery have averaged eight trucks per day, sources said last week, with sufficient supply available to sustain ongoing truck load-out operations. Warri has not started producing gasoline, according to sources. By George Maher-Bonnett, Adebiyi Olusolape and Sanjana Shivdas Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico inflation slows to 4-year low in January


25/02/10
25/02/10

Mexico inflation slows to 4-year low in January

Mexico City, 10 February (Argus) — Mexico's consumer price index (CPI) eased to an annual 3.59pc January, the lowest in four years, as deceleration in agriculture prices offset faster inflation in energy and consumer goods prices. This marks the lowest annual inflation since January 2021 and a significant slowdown from July's annual peak of 5.57pc, which was driven by weather-impacted food prices. The result, reported by statistics agency Inegi on 7 January, was slightly below than the 3.63pc median estimate from 35 analysts polled in Citi Research's 5 February survey. It compares with the 4.21pc headline inflation in December, marking five months of declines in the past six months. Mexican core inflation, which excluded volatile energy and food, sped slightly to 3.66pc in January from 3.65pc in December, while non-core inflation decelerated to 3.34pc from 5.95pc the previous month. Movement, in the non-core, said Banorte, was mostly explained by a positive basis of comparison, and "will reverse as soon as the second half of February to push the headline metric above 4pc," said Banorte. Core inflation accelerated slightly to 3.66pc in January from 3.65pc in December, marking the second uptick after 22 consecutive months of deceleration. Services inflation slowed to 4.69pc from 4.94pc, while consumer goods inflation ticked up to 2.74 from 2.4pc. Non-core inflation slowed sharply to 3.34pc from 6.57pc in December. This was largely due to base effects, Banorte said, adding these base effects are likely to fade this month to speed headline annual inflation back above 4pc. The base effects most clearly impacted fruit and vegetable price inflation, contracting 7.73pc in January from 6.65pc annual inflation the previous month. Moving forward, agriculture prices are highly exposed to the coming hot, dry season in Mexico, with the La Nina climate phenomenon, adding a layer of uncertainty. Meanwhile, energy inflation accelerated to 6.34pc in January from 5.73pc the previous month, driven by higher LPG prices. Electricity inflation, meanwhile, sped to 4.32pc in January from 2.65pc in December, while inflation slowed to 0.02pc in January for domestic natural gas prices from 5.67pc in December. Monetary policy The January inflation report followed the central bank's decision Thursday to reduce its target interest rate to 9.50pc from 10pc. This was the bank's sixth rate cut since March 2024, winding down from 11.25pc. The 4-1 decision marked an acceleration in the current rate cycle, opting for a half-point reduction rather than the previous five 25-basis-point cuts. In board comments with the announcement, the bank cited "significant progress in resolving the inflationary episode derived from the global shocks" in 2021 and 2022. These triggered rate hikes from 4pc in June 2021 to 11.25pc in April 2022, the target rate's historic high. Taking into account the "country's weak economic activity" and this progress in reducing inflation, the board said it would "consider adjusting [the target] by similar magnitudes" at upcoming meetings. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

German heating oil demand surges as prices fall


25/02/10
25/02/10

German heating oil demand surges as prices fall

Hamburg, 10 February (Argus) — German consumers stocked up on heating oil in the first week of February as prices fell. Traded heating oil volumes reported to Argus jumped by almost a third on the week, and prices fell by almost €2/100l on average nationwide between 3 February and 6 February. Many consumers had held off from buying in the week before to see if prices would drop, traders said. Consumers were further spurred on by a drop in temperatures after a relatively mild January. Privately owned heating oil tanks nationwide reached their lowest level since the beginning of July on 6 February at just over 52pc, Argus MDX data show. Industrial diesel tanks were lower in January than in the previous five years. Diesel demand is still low, traders said. In the first six weeks of 2025, diesel volumes reported to Argus dropped marginally and imports have remained largely unprofitable. Production cuts in southern Germany have yet to lead to any significant product shortages, with domestic supply sufficient to cover demand. Both the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery in Bavaria and the Miro joint venture's 310,000 b/d Karlsruhe refinery continue to produce at reduced levels. They shut down portions of their production within days of each other because of technical problems. Production at Karlsruhe is not expected to return to normal levels until the beginning of March, a departure from the original schedule which saw production increase again in mid-February. Overall production is due to remain reduced in March even with the increase in Karlsruhe, however. The 125,000 b/d Vohburg site of the Vohburg-Neustadt refinery will be taken offline entirely for maintenance works, along with several units in the 90,000 b/d Neustadt site, which has yet to resume production after a fire on 17 January. OMV plans to take its 77,000 b/d Burghausen refinery in Bavaria offline for maintenance works at the end of March. The first of two permanent production cuts scheduled for 2025 will take place in March, when Shell will cease crude distillation at the Wesseling site of its 334,000 b/d Rhineland refinery complex. The second permanent cut is due for the end of the year at BP's 258,000 b/d Gelsenkirchen refinery in west Germany. BP said on 6 February it is seeking a buyer for the refinery, and said it will go ahead with the planned reduction in crude capacity nonetheless. By Natalie Müller Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec+ output policy trumps Trump


25/02/10
25/02/10

Opec+ output policy trumps Trump

London, 10 February (Argus) — A key meeting of Opec+ ministers last week effectively backed the alliance's current output policy, which would not see any production returned to market until April. Opec+ has not, for now at least, heeded US president Donald Trump's call for the producer group to "bring down the cost of oil", something it could potentially do by raising output. As things stand, Opec+ members are due to start unwinding 2.2mn b/d of voluntary crude production cuts from April, and it intends to do this over an 18-month period rather than a previously scheduled 12 months. When the group took that decision in December, the Opec secretariat said this was "to support market stability" — an implicit nod to the uncertain demand picture and projections of a looming supply surplus in 2025. There appears to be little chance of this being expedited by Trump's call, which he made within days of taking office in January. The producer group's Joint Ministerial Monitoring Committee (JMMC) gave no indication that the alliance intends to change its output policy. But if anything, Trump's call could marginally increase the chances that the alliance finally pushes ahead with its plan to increase output in April — something it has delayed three times. This would have to fit with global supply and demand realities and the interests of the producer group. Opec+ continues to insist that it will only go ahead with the plan if market conditions allow. It is still far from clear whether there will be sufficient room in the market for added Opec+ output this year. One key uncertainty relates to Trump himself and the impact his tariff policies will have on the global economy. For now, the demand picture remains uncertain. Trump's threat to tighten sanctions on Iran and Russia could have a more direct impact on supply, but his plans remain vague. Opec+ delegates continue to monitor market conditions. A decision on whether to proceed with planned increases from April is due in early March. "We do not believe that Opec has the ability to bring back any barrels to the market through the whole of this year," data analytics firm Kpler head analyst Matt Smith said at the Argus Americas Crude Summit in Texas this week. "Anything that Saudi Arabia wants to bring back is only going to increase that surplus above what we saw in 2020, and we all know what happened to prices back then." He is not the only one who doubts there is sufficient room in the market for more Opec+ output. Energy watchdog the IEA continues to project a sizeable supply surplus this year, even in the absence of additional Opec+ production. Output reduction Opec+ members subject to targets reduced their collective crude output by 20,000 b/d to 33.51mn b/d in January, Argus estimates (see tables). This fall means Opec+ has slashed its production by 4.01mn b/d since October 2022, when it announced the first of its current round of cuts. Compliance has improved in recent months, with output 340,000 b/d below the collective target of 33.85mn b/d in January. There is still room for improvement. Iraq has slipped back into the red, exceeding its target by 20,000 b/d last month. Gabon was 80,000 b/d above its target. Kazakhstan's compliance has picked up recently, but the start of a new production phase at the Tengiz oil field has raised questions over its willingness to stick to its quota this year. But the group is keeping the pressure on. The statement following the JMMC meeting once again put a large emphasis on the importance of member conformity with production targets. It stressed the need for members that have exceeded their targets to fully deliver on their pledges to compensate for past overproduction. These must be delivered by the end of September. By Aydin Calik and Nader Itayim Opec+ crude production mn b/d Jan Dec* Jan target† ± target Opec 9 21.17 21.23 21.23 -0.06 Non-Opec 9 12.34 12.30 12.62 -0.28 Total 33.51 33.53 33.85 -0.34 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Jan Dec Jan target† ± target Saudi Arabia 8.88 8.91 8.98 -0.10 Iraq 4.02 3.99 4.00 +0.02 Kuwait 2.42 2.44 2.41 +0.01 UAE 2.87 2.85 2.91 -0.04 Algeria 0.90 0.91 0.91 -0.01 Nigeria 1.51 1.55 1.50 +0.01 Congo (Brazzaville) 0.26 0.27 0.28 -0.02 Gabon 0.25 0.24 0.17 +0.08 Equatorial Guinea 0.06 0.07 0.07 -0.01 Opec 9 21.17 21.23 21.23 -0.06 Iran 3.33 3.40 na na Libya 1.35 1.31 na na Venezuela 0.90 0.90 na na Total Opec 12^ 26.75 26.84 na na †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Jan Dec* Jan target† ± target Russia 8.96 8.97 8.98 -0.02 Oman 0.75 0.75 0.76 -0.01 Azerbaijan 0.49 0.49 0.55 -0.06 Kazakhstan 1.49 1.40 1.47 +0.02 Malaysia 0.28 0.33 0.40 -0.12 Bahrain 0.19 0.19 0.20 -0.01 Brunei 0.10 0.09 0.08 0.02 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.06 0.06 0.12 -0.06 Total non-Opec 12.34 12.30 12.62 -0.28 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Noboa's tight lead triggers runoff in Ecuador


25/02/10
25/02/10

Noboa's tight lead triggers runoff in Ecuador

Quito, 10 February (Argus) — Ecuador will hold a second-round presidential election on 13 April after incumbent President Daniel Noboa had a closer-than-expected lead over his main challenger in Sunday's election, the electoral authority said. Noboa had 44.5pc of votes as of 11:30pm ET on Sunday, closely followed by Luisa Gonzalez, the candidate for the Citizens' Revolution party with 44.1pc, with 80pc of votes counted, the national electoral council (CNE) said. Ecuador's presidential election goes to a second round if the winning candidate does not have more than 50pc of votes or 40pc of votes with a 10-percentage point lead over the runner-up. Gonzalez' party was founded by exiled former president Rafael Correa, a close friend and supporter of Venezuelan president Nicolas Maduro. Correa guided taking on crude-backed loans from China during his term and oversaw a rewrite of the constitution, allowing him to serve for 10 years. Gonzalez in brief comments said she was optimistic about winning the second round, while Noboa did not speak publicly. This is the first time since 2006 that the candidate with Correa's party did not win at least the initial round of a presidential race. Pachacutik candidate Leonidas Iza was in third place with 4.8pc of votes. His party is the political arm of the Confederation of Indigenous Nationalities (Conaie) that led an 18-day national strike in June 2022, cutting Ecuador's crude production by 17pc that month. The remaining 13 candidates obtained about 6.6pc of the valid votes. About 13.7mn Ecuadorians were required to appear at the polls. Voting is mandatory in the South American country, but only around 85pc actually voted. Ecuadorians also voted for 151 members of the national assembly. Gonazalez' party and Noboa's National Democratic Action party are forecast to win the biggest shares, but officials results will not be known for several days. By Alberto Araujo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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