Lloyd’s List: US imposes sanctions on Venezuelan oil giant

29 January 2019

“It will significantly add to tanker tonne-mile demand with long-haul very large crude carrier trips replacing short-haul aframax voyages,” Poten & Partners said in its weekly note.

Under this scenario, US refiners will need to look for cargoes to replace the Venezuelan heavy crude. Production of heavy crude oil in Mexico has been in decline and moving Canadian heavy grades to the US Gulf has been a challenge.

According to Poten, US refiners could end up importing more Middle Eastern heavy grades, which would be another boost for VLCC demand.

On the product side, the situation is rather similar. If Venezuela can no longer rely on US supplies, it may need to import additional refined products from Europe, which is a much longer voyage.

“Alternative sources of supply, including refiners in the Middle East or Asia would generate even more tonne miles and could trigger a switch from [medium range tankers] to [long range one vessels],” said Poten & Partners.

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