Venezuela’s Oil Exports in September Boosted by Sales to China, Awaps with Iran

More shipments to Asia through intermediaries and growing cargo swaps with Iran drove Venezuela’s oil exports in September to their third highest level this year, internal documents and tanker tracking data showed.

The OPEC-member nation’s oil exports were volatile earlier this year due to a lack of diluents required to produce exportable grades and unstable output amid processing outages and scarce drilling equipment.

But oil production and exports regained their footing in the third quarter, helped by Iran’s supplies of condensate and crude to state-run oil company PDVSA, and deliveries of Venezuelan heavy crude and fuel oil to Iranian state companies.

A total of 40 cargoes departed from Venezuelan waters last month carrying an average of 710,033 bbl/d of crude and fuel, and 544,000 metric tonnes of byproducts mainly to China through regional hubs, according to PDVSA’s internal shipping documents and Refinitiv Eikon vessel tracking data.

Much of the oil was acquired and resold by companies with no track record in crude trading. These intermediaries, which arrange shipment, payment and final buyers, accounted for 79% of the exports, the PDVSA documents showed.

September exports fell 13% from the prior month's record of 816,450 bbl/d, but were 75% higher compared with the same month last year.

Third quarter exports by PDVSA and its joint ventures rose to 691,100 bbl/d from 595,035 bbl/d in the prior quarter and 573,780 bbl/d in the first quarter. Venezuela’s crude production increased by 94,000 bbl/d to 723,000 bbl/d in August, according to the most recent official figures reported to OPEC.

Three very large crude carriers (VLCC) chartered by Iran arrived in Venezuelan waters last month carrying 3.9 million barrels of crude and some 2 million barrels of condensate. Venezuela delivered 1.78 million barrels of heavy crude and 928,000 barrels of fuel oil to Iran in exchange, the documents showed.

In total, Venezuela has received this year over 24 million barrels from Iranian companies and provided 21 million barrels under a 2021 swap agreement that was expanded earlier this year.

The Iranian supply has helped PDVSA boost operations at its main oil producing region, the Orinoco Belt. But low inventories of domestic light crude for blending and power outages continued to plague PDVSA facilities last month, according to one of the documents.

Exports to Cuba fell to 36,000 bbl/d in September from 81,200 bbl/d the previous month.