Page 5 - LatAmOil Week 38

LatAmOil COMMENTARY LatAmOil

The third fleet consisted of three ships. All of target the shipping sector.
these were initially said to be loaded with Ira- There is precedent for this, as Washington has
nian gasoline, but Bloomberg and other agencies already applied sanctions to Russian companies
reported earlier this week that the vessels were accused of acting as middlemen for Venezuelan
actually carrying gas condensate, a light hydro- exports (and has also signalled its willingness to
carbon that can easily be refined into gasoline. penalise marine operators that do business with
In any event, they did arrive in Venezuela last Caracas).
week and delivered their cargoes to PdVSA for But there may also be more seizures. That
domestic consumption. is, the US may opt to confiscate the cargo of the
next fleet that attempts to bring refined fuels
Third time’s the charm or similar materials from Iran to Venezuela –
The ships of the first and second fleets appear and it may do so after putting more pressure
to have had no involvement in two-way trade. on shipping companies and marine facilities
That is, they may have been loaded with Iranian to help thwart efforts by Tehran and Caracas to “
gasoline for delivery to Venezuela, but they were conceal such shipments through the disabling of The Iranian
not loaded back up again after discharging their transponders.
cargoes in the South American state or in a US tanker will
port. Ongoing struggle probably take
At least one of the third fleet’s vessels, In the meantime, fuel supply issues will continue
by contrast, has filled up for the return trip. to loom large in Venezuela. The country has the Venezuelan
Bloomberg reported on September 23 that the bought some time with the latest Iranian ship-
Iranian-flagged tanker, known as the Horse (and ments, but it is still struggling in the face of the oil to Asia
sometimes as the Honey), had been loaded up challenges posed by the sanctions.
with Merey-16, an extra-heavy blend that is the That struggle, according to Bloomberg, has
main grade of crude exported from Venezuela. led to something like industrial cannibalism.
The oil will probably be exported to Asia, That is, it has driven PdVSA to strip scrap metal
which has become the main destination for and parts from production, processing and
Venezuelan production, the news agency said. refining facilities that have been taken offline.
It did not name any possible buyers, but it did The NOC reportedly hopes to use these mate-
note that most crude traders would be reluctant rials to pay in kind for repair work at pumping
to buy Venezuelan product because of the risk of stations and compressor units that serve pro-
being penalised under the US sanctions regime. duction facilities in Monagas. This state, located
in eastern Venezuela, is home to deposits of light
Stepping up sanctions enforcement? crude oil that can be refined more easily than the
As of press time, the US government had not extra-heavy grades from the Orinoco belt.
reacted publicly to news of the Iranian-aided As of press time, Venezuelan authorities had
shipment of Venezuelan crude. not said whether any potential partners had
Washington may take a different stance if shown interest in the scrap metal and parts.
Caracas tries this tactic again, though. More This is not the first time Caracas has tried to
specifically, it will probably step up enforcement pay in kind for refinery and production equip-
of the sanctions regime if it sees that Venezuela’s ment repairs. Venezuelan officials recently tried
government is trying to open up a new export – and failed – to convince suppliers to accept
route for its oil. crude oil and fuel as compensation for $800mn
If so, some of the US actions will probably worth of maintenance work and fixes. ™

(Photo: EFE)

Week 38 24•September•2020 www. NEWSBASE .com P5