Feb 7 (Reuters)
Trading houses that resell Venezuelan crude oil have not yet found workarounds since the United States announced sanctions to cut off socialist President Nicolas Maduro's revenue, according to shipping data and sources.
Merchants, trading partners and Venezuela's state-run PDVSA were expecting oil swaps and so-called triangulation of sales to be the easiest ways to continue shipping, as has happened when sanctions were imposed on other nations, such as Iran and Russia.
But the U.S. measures - tougher and deeper than past sanctions - have for now blocked a large portion of trading in Venezuelan oil worldwide as end-users are reluctant to take cargoes, leaving barrels stranded in the Atlantic basin, according to data from Refinitiv Eikon.
The lack of Venezuelan oil has U.S. refiners scrambling for replacements and threatens global trade that is worth $6 billion a year.
The sanctions are affecting Europe-based trading firms including Trafigura and Vitol, which regularly offer Venezuelan oil to refiners, and PetroChina Co Ltd, which along with Russia's Rosneft recoup money lent to Venezuela by reselling PDVSA barrels.
Almost 9 million barrels remain stuck in tankers waiting for payment or discharge instructions, according to Eikon data. Most are anchored in the U.S. Gulf Coast as self-proclaimed president Juan Guaido rushes to set up escrow accounts to receive proceeds.
Trading companies have also delayed loadings of Venezuelan oil scheduled by PDVSA for February delivery, according to sources and data, because merchants are having trouble finding buyers.
"No one who typically takes Venezuelan crude from us is lifting a single barrel," a Trafigura trader said, referring to barrels offered on the spot market. "Buyers are not sure of the risks and how to ensure any payments are not remitted to PDVSA."
To be sure, PDVSA has not stopped exporting. There are more than a dozen tankers in the water headed for destinations like India, China and Singapore that have loaded since sanctions were imposed on Jan. 28, according to Refinitiv Eikon data.
Most vessels will not arrive at their destinations for several weeks, but they are for end-users like India's Reliance Industries Ltd, which pays for Venezuelan crude by cash and oil swaps.
Those exports, if completed, would amount to about 1 million barrels per day, short of the 1.4 million bpd average for the three previous months, according to Eikon.
The U.S. sanctions limit U.S. refiners to paying into escrow accounts that cannot be accessed by Maduro's government, effectively cutting off shipments. Foreign firms that engage in oil trading involving the U.S. financial system or U.S. units are similarly restricted.
Trafigura told Reuters the firm is following "all applicable sanctions." Vitol did not immediately comment but has previously said that it is compliant with sanctions. PetroChina did not immediately respond to a request for comment.
Trading houses lifted some 255,000 barrels per day (bpd) of Venezuela's crude and fuel in 2018, or 20 percent of overall exports, according to PDVSA's internal data seen by Reuters.
Sales could flow temporarily if European branches of oil firms and trading houses find a way to sell Venezuelan crude in currencies other than U.S. dollars, but Europe is also mulling sanctions, meaning the window could close quickly.
PetroChina, which resells Venezuelan oil to customers in destinations from the United States to Singapore, has recently reduced cargo lifting.
The Aframax tanker Flavin chartered by PetroChina arrived in Venezuelan waters on Jan. 25, and was scheduled to load 500,000 barrels of fuel oil bound for Rotterdam, Netherlands. But the oil has not been loaded, in part due to sanctions, according to two sources involved in the case.
As of Feb. 7, the Flavin was still docked at PDVSA's Amuay port, according to Eikon. Another PetroChina cargo, the Aframax Stride, was loaded on Jan. 25, but it is now anchored off the Caribbean island of St. Eustatius.