Lloyds List: Port Constraints and Cash Crunch Stifle Venezuelan Oil Trade

25 May 2016: “Poten & Partners said that PDVSA was forced to increase imports of refined products earlier this year as power shortages and insufficient maintenance affected its refineries. ‘A surge in product imports, combined with the financial stresses facing Venezuela, predictably created problems when product tanker owners were not paid (on time) and decided to delay discharging their cargo,’ it said recently. “…An increasing amount of Venezuelan crude has been shipped on VLCCs to the Far East, while the short-haul Caribbean–US Gulf and Caribbean–Europe trades have shrunk, although the aframax and suezmax trades still account for a large number of fixtures, according to Poten & Partners. India now gets around 12% of its crude imports from Venezuela, and China around 6%. In March, China raised crude imports from its seventh-largest supplier Venezuela by 84% to roughly 510,000 barrels per day, official data showed. An oil-for-loans agreement between Venezuela and China will continue to see crude being sent to the Far East.Meanwhile, Venezuela is on the verge of economic meltdown. The International Monetary Fund warned in January that Venezuela’s inflation will surge to 720% in 2016 from 275% last year. Geopolitical consultant Eurasia Group said Venezuela is the most vulnerable to low oil prices among all Latin American countries as oil accounts for 96% of its exports and is its main source of foreign exchange. ‘Barring a meaningful recovery in oil prices or fresh loans from China in the second half of the year, scarce foreign exchange will probably force the state to default later this year, most likely in the fourth quarter, when a total of $4.8bn in PDVSA and sovereign obligations come due,’ it said in a report.”