Exxon wields clause banning ships with Venezuela visits

ExxonMobil is banning the use of any ship that has visited Venezuela in the last year to fulfill future crude shipments, a move that could effectively sideline hundreds of tankers from working for the company.

The charter party clause to be used on future ExxonMobil shipping agreements obtained by Argus states that the shipowner "warrants that the vessel has not within the previous one year from the date of this charter called at a port or place in Venezuela, carried any cargoes to or from Venezuela, or been chartered to, or otherwise engaged in any dealings with, any party identified in respect of any Venezuelan sanctions."

The clause relates to sanctions the US government has imposed on Venezuela and state-controlled oil company PdV, including a ban on crude shipments.

ExxonMobil was a top ten dirty tanker spot charterer in 2018, according to shipbroker Poten and Partners, so such a policy would mean roughly 500 tankers could not do business with the company. Of those 500 tankers, about 300 called Venezuela prior to the 29 January sanctions that effectively banned US-Venezuela oil trade.

ExxonMobil declined to comment on the clause, saying that it and its affiliates "charter solely from vessel owners that are in compliance with applicable export controls and trade sanctions."

Brian Gallagher, head of investor relations at tanker operator Euronav, said ExxonMobil chartered on 15 October a tanker with a recent Venezuela visit to load a cargo in west Africa — suggesting the clause was not included in that charter party.

The idea that the clause would also sideline tankers were considered in full accordance with US sanctions against Venezuelahas vexed Euronav. Gallagher said he was "perplexed" that some tonnage in Euronav's 65-strong tanker fleet was on ExxonMobil's blacklist, because his firm's tonnage had conducted shipments from Venezuela for US oil major Chevron, which had secured a sanctions waiver from the administration of US president Donald Trump.

While the US Treasury has not explicitly sanctioned Venezuelan oil shipments to the broader international market beyond the US and Cuba, the Treasury has discouraged oil trade with the country. Many shipowners avoid calling the country's ports for fear that they may fall afoul of sanctions.