WEAK VENEZUELA SANCTIONS

OGJ - US sanctions against Venezuelan state oil company Petroleos de Venezuela SA (PDVSA) will deal a meaningful blow to President Nicolas Maduro's administration's cashflow, but the effects will not be as harsh as the US expects, according to Rystad Energy.

"Administration officials reportedly said the sanctions would result in more than $11 billion in export losses for Venezuela over the next year, but I believe this figure will be substantially lower," Rystad Energy analyst Paola Rodriguez-Masiu said.

Rodriguez-Masiu, a native Venezuelan who coordinates Rystad Energy's global refinery and infrastructure data, added, "The oil that Venezuela currently exports to the US will be diverted to other countries and sold at lower prices. For countries like China and India, yesterday's news was akin to Black Monday. They will be able to pick up these oil volumes at great discounts."

Few countries have refining capacity that can handle the heavy crude oil quality coming out of Venezuela. The country currently exports about 1.2 million b/d, of which some 450,000 b/d goes to the US, while 300,000 b/d goes to India and 240,000 b/d to China.

Many refineries along the US Gulf Coast import Venezuelan heavy crude to mix with lighter oil coming out of shale basins such as the Permian in West Texas. With sanctions in place, those refineries will have to turn to other sources for heavy crude.

"The sanctions will affect refinery margins in the US. Now they will have to import heavy crude from the Middle East at a premium. US refiners will be amongst the biggest losers, as we have noted earlier," Rodriguez-Masiu said.

The oil market largely shrugged off news of the sanctions. "The market has priced in the Venezuelan crisis. Plus, the export volumes will not be eliminated from the market, but rather rerouted to other countries," the Rystad Energy analyst said.

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Earlier:  

2019, January, 30, 11:30:00 U.S., VENEZUELA SANCTIONS ALWAYS PLATTS - The Trump administration announced Monday that it will sanction PDVSA, Venezuela's state-owned oil company, a move that could suspend roughly 500,000 b/d of Venezuelan crude exports to US Gulf Coast refineries and shut down US exports of diluents to the South American nation.

2019, January, 25, 08:20:00 U.S. - VENEZUELA SANCTIONS PLATTS - Chevron, PBF Energy, Valero and Citgo, which is owned by PDVSA, are the largest US refiners of Venezuelan crude, according to the US Energy Information Administration. Spokesmen for those four companies did not respond to requests for comment Wednesday.

2019, January, 9, 10:45:00 VENEZUELA'S OIL PRODUCTION: BELOW 1 MBD PLATTS - The US Energy Information Administration forecasts that Venezuelan oil production will fall below 1 million b/d in the second half of 2019, according to Erik Kreil, an international energy analysis team leader with the EIA.

2018, September, 17, 15:00:00 VENEZUELA - CHINA COOPERATION REUTERS - Venezuela gave China another stake in the OPEC nation’s oil industry and signed several other deals in the energy sector, but Beijing made no mention of new funds for Caracas during President Nicolas Maduro’s visit to his key financier on Friday.

2018, September, 13, 14:10:00 U.S. SANCTIONS AGAINST THE WORLD CNBC - "We can see that the pricing situation today depends not just on the supply/demand balance or the general economic situation but also on the uncertainty that we observe today in the global markets: the trade wars, the sanctions that the U.S. pursue," Novak said, speaking to CNBC's Geoff Cutmore at the Eastern Economic Forum (EEF) in Vladivostok, Russia.

2018, July, 25, 09:15:00 VENEZUELA'S ECONOMIC COLLAPSE IMF - On Venezuela, it is difficult to discuss because it is in a state of economic collapse. We have not engaged with them in over a decade on their economic policies.

2018, June, 8, 12:55:00 VENEZUELA IRAN SANCTIONS BLOOMBERG - Venezuela wrote to fellow OPEC members urging them to unite against U.S. sanctions, echoing a similar letter from Iran, according to people with knowledge of the matter.