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Who is buying Venezuela’s oil?

Bnamericas Published: Wednesday, January 22, 2020
Who is buying Venezuela’s oil?

China and India accounted for more than half of Venezuelan crude oil exports in 2019 as stricken state oil company PDVSA increasingly looks toward Asia to replace lost US customers.

Venezuela sent 320,000b/d of oil to China and 218,000b/d to India last year, representing 56% of the South American country's crude exports, according to a report published by Washington-based think tank the Inter-American Dialogue. 

US Energy Information Administration data shows that China and India received 47% of Venezuela's total oil shipments in 2017. 

Other markets to help absorb Venezuelan oil exports in 2019 were Europe, which received 119,000b/d, Cuba (70,000b/d), Singapore (55,000b/d) and Malaysia (53,000b/d).

Meanwhile, PDVSA dispatched just 43,000b/d to US buyers last year, down from 619,000b/d in 2017. 

The shifting trade routes follow sanctions imposed by Washington last January that blocked US$7bn of PDVSA assets in the US and effectively banned imports of Venezuelan oil.

The move formed part of a series of measures designed to raise pressure on President Nicolás Maduro, whom the White House accuses of running a dictatorship. 

OUTLOOK

Growing demand from Europe and Asia has failed to halt a sharp decline in Venezuela's overall crude exports as ongoing economic and political turbulence throttles local production. 

Despite sitting on the world's largest oil reserves, Venezuela saw exports of the commodity fall to 962,000b/d last year from 1.523Mb/d in 2017.

"After years of mismanagement and, more recently, crippling sanctions, Venezuela’s central economic engine – the oil sector – is in collapse," the Inter-American Dialogue report said. "It’s increasingly clear that the disputed president, Nicolás Maduro, will not take the necessary steps to revive the sector and tackle Venezuela’s economic crisis."

The report warned that even in the event of political change, Venezuela's once-thriving hydrocarbon industry would take "months or years" to recover. 

"Although the timing and nature of a political transition in Venezuela are uncertain ... international oil companies will be the key to tapping the country’s oil resources," it added.  

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