More oil traders, vessel operators shun links to Venezuela’s oil
More vessel operators and energy firms are shunning Venezuelan oil and the tankers that have carried it, according to brokers and traders familiar with the matter.
Unipec, the trading arm of China’s Sinopec, Swiss trader Trafigura AG, oil firm Equinor ASA, Exxon Mobil Corp and others are shunning contracts or vessels that might put them in jeopardy of violating U.S. sanctions on Venezuela, according to sources and documents.
The United States in early August ratcheted up sanctions on Venezuela, adding measures that could punish non-U.S. firms, in efforts to squeeze President Nicolas Maduro, whose 2018 re-election is not considered legitimate by the Trump administration and most Western nations.
Unipec revised its contracts afterward to stipulate vessels it charters have not called at a port in Venezuela in the past year, according to a copy of the clause viewed by Reuters. Unipec is one of the main Chinese lifters of U.S. crude.
Neither Unipec nor Sinopec could immediately be reached for comment.
Trafigura has not changed its contract clauses, but it has instructed its traders to do “zero business with Venezuela, not directly or indirectly,” one broker doing business with the company said.
Trafigura declined to comment.
Equinor declined to comment, but said in an emailed statement it “follows all relevant sanctions applicable to us.”
Exxon revised its charter contract to bar tankers that have recently gone to Venezuela, according to a contract revision that brokers received last week. Exxon declined to comment.
Exxon and Unipec’s new clauses affect about 250 tankers, according to people familiar with the matter. The blacklisting has more than doubled freight rates for very large crude carriers routes to Asia to a record $14 million in less than a month.
More than 25 foreign vessels touch Venezuelan ports per month, according to PDVSA’s and Refinitiv Eikon data.
PDVSA did not respond to a request for comment on the vessel blacklisting.
Many shipping firms that were sending vessels to Venezuela after the first round of U.S. sanctions in January are no longer calling at the country’s ports or carrying Venezuelan oil, maritime sources said, reducing the availability of tankers for exports and adding to fast accumulation of unsold oil stocks, which forced PDVSA to cut back output last month.
The Trump administration is preparing new sanctions on Cuba over its support for Maduro, the U.S. special envoy on Venezuela, Elliott Abrams, told Reuters earlier this week.
Sanctions under consideration for Cuba likely would target the island’s tourism sector as well as Venezuelan oil deliveries to Havana, building on the U.S. blacklisting of tankers used to transport the supplies, a senior official said.
“There is a significant risk that new measures or sanctions may be introduced, with little or no forewarning from the U.S. administration,” insurance provider Steamship Mutual said in a note.
Source: Reuters (Reporting by Marianna Parraga in Mexico City, Collin Eaton in Houston and Julia Payne in London Editing by Sonya Hepinstall)