Page 5 - LatAmOil Week 39 2022

LatAmOil COMMENTARY LatAmOil

That is, a number of obscure companies headed industry that is their largest source of revenue.
by, established by or linked to Russian nation- Now that Russia has joined the ranks of
als are reported to have played a role in mov- countries sanctioned by the US, however, it is
ing crude from Venezuela to Asia by tanker in not showing the same sort of generosity. On the
ways that are designed to conceal or obscure the one hand, Russia is not maintaining its upstream
origin of their cargos. Some of these companies presence in Venezuela. Rather, Argus Media has
have known connections to Rosneft, while oth- reported recently that Roszarubezhneft is qui-
ers do not. etly withdrawing from its joint ventures with
In any event, these Russian entities continued PdVSA.
to provide PdVSA with an invaluable service On the other hand, Russian oil exporters are
through 2020 and 2021. That is, they continued reportedly stepping up the competition for “dark
to deliver Venezuelan oil to willing customers, fleet” tankers – that is, crude and fuel carriers
most of them in Asia, in a manner that incor- operated by obscure companies that are willing
porated just enough plausible deniability that to move liquid cargoes from sanctioned coun-
the US government did not make too much of a tries – in order to ensure that their production Russian
fuss about sanctions. After all, Washington was, reaches the market. This competition is report-
by then, quite distracted with matters related to edly having a direct and negative impact on the competition
the coronavirus (COVID-19) pandemic, the volume of Venezuelan (and Iranian) oil availa- for “dark fleet”
economic fallout resulting from public health ble to buyers in Asian markets such as India and
restrictions and a contentious presidential China. tankers is having
election.
Moreover, the amount of Venezuelan oil hit- Tighter Iran-Venezuela ties? a direct and
ting world markets was also down in 2020 and For Iran, the result of this development has
for most of 2021 too. This was partly because US been an increased reliance on vessels owned by negative impact
sanctions were doing a decent job of preventing National Iranian Tanker Co. (NITC) to export on Venezuelan
PdVSA from accessing the parts and equipment the country’s crude production. But for Ven-
it needed to keep its production infrastructure ezuela, the outcome could be a move toward (and Iranian)
in good repair and partly because the pandemic greater co-operation with Iran – especially if
dragged global energy downward in 2020. the latter is willing to offer even more of the crude oil flows
fuel, blendstock, parts, equipment and techni-
Late 2021: Iran steps in cal assistance it agreed to provide in November
But conditions have changed since late 2021. 2021.
In practical terms, Venezuelan oil output and Meanwhile, Iranian deliveries to Venezuela
export volumes started going up in late 2021 certainly don’t seem to be slowing down. Reu-
thanks to a series of agreements that Caracas ters reported earlier this week, citing documents
signed with Tehran. Under those agreements, from PdVSA, that two Iranian tankers were due
Iran has been providing PdVSA with some to dock at the Jose terminal on Venezuela’s coast
of the things it needs the most – lightweight within the next few days to deliver 1.22mn bar-
blendstocks such as gas condensate that can be rels of crude oil and 2mn barrels of gas conden-
combined with Venezuela’s extra-heavy crude to sate. One of the tankers has been identified as the
make a lighter synthetic oil that is easier to sell Huge, a very large crude carrier (VLCC) owned
on international markets, parts and equipment by NITC, while the other ship has the name of
that can be used to repair decrepit refineries a vessel that is reported to have been scrapped,
and production facilities, technical assistance Reuters said, citing the PdVSA documents.
from Iranian experts and periodic deliveries of Both of the cargoes were supplied by NaftI-
Iranian petroleum products for distribution on ran Intertrade Co. (NICO), a state-owned Ira-
Venezuela’s fuel-starved domestic market. nian firm.
Iran’s generosity in this realm is not difficult PdVSA materials show that Iran took deliv-
to understand. Both Tehran and Caracas are ery of around 4.8mn barrels of Iranian crude
targets of US sanctions, and officials in both and gas condensate in July and August of this
capitals have spoken frequently of the need for year, Reuters noted. The two shipments men-
and benefits of co-operation in the face of Wash- tioned above will bring the total up to 8.02mn
ington’s efforts to discourage investment in the tonnes. ™

(File photo)

Week 39 28•September•2022 www. NEWSBASE .com P5