Venezuela, owner of the world’s largest crude oil reserves, suddenly has a deep thirst for American oil.
Petroleos de Venezuela SA, the state-owned oil company, has ordered millions of barrels of crude from the U.S. this year, according to published reports and data provided to Bloomberg, in a sign of how the lifting of the ban on U.S. oil exports last year has scrambled world energy markets.
The South American country has long had frosty relations with the United States. Still, it has ordered 500,000 barrels of U.S. crude from oil trader PetroChina Co. Ltd., Reuters reported Monday. That’s on top of 5.4 million barrels of benchmark West Texas Intermediate oil it ordered and at least 1 million barrels shipped this month to PDVSA’s refinery in nearby Curacao.
PDVSA, despite having access to the world’s largest petroleum reserves, according to the BP statistical review, uses lighter crude from abroad to blend with its heavier production. In 2015, the company imported about 40,000 barrels a day from countries including Russia, Nigeria and Angola, according to data compiled by Bloomberg. Now, that’s increasingly coming from the U.S., where the ban on exporting most oil was lifted in December.
At the end of January, PDVSA received its first cargo of 548,000 barrels of WTI in Curacao, two people familiar with the shipment said at the time. Earlier this month, the company issued a tender for 12 million barrels of crude from April to June, including WTI, Russian and Nigerian oil. Last week, the oil tanker Orpheas was said to be en route to Curacao from the U.S., according to ship-tracking data compiled by Bloomberg and a person familiar with the matter. The vessel is a Suzemax tanker, with a typical cargo capacity of 1 million barrels.
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It’s a reversal from the past. Venezuela exported about 800,000 barrels of crude a day to the U.S. in 2015, according to the Energy Information Administration.
Venezuela was trying to figure out a way to use U.S. crude even before the export ban was lifted, said Francisco Monaldi, a Latin American energy policy fellow at Rice University in Houston. PDVSA’s own production of lighter oil has cratered in recent months, along with the rest of the country’s economy, he said in a phone interview.
“It’s much easier and cheaper and closer to import crude from the U.S.,” Monaldi said. Venezuelan officials “are so desperate that at this point, they are very pragmatic. These guys are clearly pursuing a strategy that is focused on the economics and commercial issues and not on politics.”
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