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| Caribbean-Latin America |
| 16 Tankers Are Stuck With 8.36 Million Barrels Of Venezuelan Crude That Nobody Wants |
| 2019-02-27 |
| Hat tip: gCaptain Venezuela is running out of space to store its sanction-stained crude that few dare to buy, forcing it to reduce output at a time when the world is thirsty for heavy, sulfurous oil. Tankers holding 8.36 million barrels of Venezuelan crude worth upwards of a half-billion dollars are floating off the country's coast as the nation struggles to find buyers for its oil following new U.S. sanctions in January. An armada of 16 ships holds cargoes belonging to state oil company Petroleos de Venezuela SA, Chevron Corp., Valero Energy Corp. and Rosneft Oil Co PJSC, according to shipping reports and ship-tracking data compiled by Bloomberg. Oil ventures owned by PDVSA with Rosneft, Chevron, Total SA and Equinor ASA, whose upgraders convert tar-like Venezuelan crude into oil that refineries can process, reduced rates this week because they ran out of space to store crude, according to people with knowledge of situation. With few buyers willing to take PDVSA's oil, the alternative was to put some of that oil onto tankers to clear space and continue to operate at lower rates. The backlog of ships and growing difficulty in keeping its oil upgraders running underscore the impact U.S. sanctions are having on PDVSA. Shipments to the America, once Venezuela's largest customer, have dried up. Without access to the U.S. financial system, on which many refiners and trading houses rely on to finance purchases, PDVSA is having trouble finding buyers outside of countries such as India and China, to whom it owes oil in payment for past loans. The PDVSA-Rosneft joint-venture Petromonagas upgrader isn't processing oil after running out of space to store their production, a person with knowledge of the situation said. PDVSA-Chevron's Petropiar venture has reduced output for the same reason, other people said. Petrocedeno, a PDVSA-Total-Equinor venture, is running out of oil to process as a ban on sales of heavy naphtha to PDVSA has made it difficult to ship the heavy oil through pipelines from inland fields to the upgrader, another person said. While Venezuela has been having a hard time selling its oil, the rest of the world struggles to find heavy barrels after Canada's self-imposed oil curtailment and OPEC supply cuts reduced the availability of the type of oil Venezuela produces. The tightness in heavy oil supply translated into higher prices for Colombia's flagship oil Castilla, which competes with Venezuelan oil in the global market. Castilla for loading in March traded $4 per barrel less than global benchmark Brent, according to people with knowledge of situation. That compares with a discount of $9.80 for cargoes that loaded in February. All that sanctioned heavy crude oil that nobody wants to touch. |
| Posted by:Alaska Paul |
| #9 swksvolFF, it is all about chemistry and how deeply buried the source materials are underground. Natural gas, oil, and coal are different minerals underground that arise from the same sediments. Natural gas has very short carbon chains, one to five carbons in a row. Oil has longer chains, six to dozens. (Octane is eight carbons in a row.) Venezuelan crude is between oil and coal and is bitumen or asphalt, which has lots more carbon organized into many dense rings. Coal has even longer crazy carbon structures. Refineries take whatever they get and then use different catalysts to break down the carbon chains and remove impurities, like sulfur, to make the products normal people use, such as gasoline, motor oil, asphalt, propane, and natural gas. Hope that helps. |
| Posted by: rammer 2019-02-27 22:22 |
| #8 Somebody better do something fast before that tub of tar hardens and then you'll have to chip it out. |
| Posted by: AlmostAnonymous5839 2019-02-27 21:22 |
| #7 and pay very little for it |
| Posted by: Frank G 2019-02-27 18:58 |
| #6 Venezuela will have no market in a decade or so since one one will be able to refine their sludge. They will dilute it with US very light, sweet crude produced by fracking and ship it to Asia. |
| Posted by: Eohippus Graick2440 2019-02-27 17:08 |
| #5 at a time when the world is thirsty for heavy, sulfurous oil. Could someone who knows explain this to me? I've always understood refining this Venezuelan oil is something akin to separating the individual ingredients of toothpaste...is it more viscous or enduring or otherwise special? |
| Posted by: swksvolFF 2019-02-27 16:21 |
| #4 At least the holds of the tankers won't rust much, so they've got that going for them...which is nice |
| Posted by: Frank G 2019-02-27 15:35 |
| #3 The ironic thing is, the US is the only country that can refine it in bulk. And with our fracking success our refineries are switching from heavy to sweet crude. Venezuela will have no market in a decade or so since one one will be able to refine their sludge. |
| Posted by: DarthVader 2019-02-27 15:26 |
| #2 Nobody wants to have to pay for it twice - once to Maduro and again to his successor. |
| Posted by: Glenmore 2019-02-27 15:24 |
| #1 So why not sanction Rosneft, Chevron, Total SA and Equinor ASA. |
| Posted by: Woodrow 2019-02-27 13:38 |