Defying U.S. sanctions, Venezuela doubles crude oil exports

Lucia Kassai January 03, 2022

(Bloomberg) --Oil exports from Venezuela doubled in December from a year earlier as the country raises production of revenue-generating hydrocarbons in defiance of U.S. sanctions.

Shipments averaged 619,000 barrels a day in December. The OPEC-founding member increased exports for a third straight month with the support of ally Iran, which boosted the supply of a key ingredient that aids production.

Output touched the crucial mark of 1 million barrels on a single day in December, state-owned oil company Petroleos de Venezuela SA said. Production averaged 625,000 barrels a day during the entire month of November.

Exports are rising after benchmark Brent oil rose 50% last year, the largest gain since 2016, as global demand bounces back from the pandemic. The increase also comes at at time when the Organization of Petroleum Exporting Countries and its allies may boost supplies amid a tighter first-quarter surplus than initially expected.

Still, it’s unclear if the spike in shipments is sustainable because China, the biggest buyer of Venezuelan oil, continues to crack down on the energy sector. Private fuelmakers in the Asian nation are at the center of allegations of tax violations and non-compliance with environmental rules. There are already signs of problems. Supertankers laden with Venezuelan oil that have sailed to Asia end up floating off the coasts of Singapore and Malaysia for months waiting for Chinese buyers.

The U.S. amped up sanctions against the regime of President Nicolas Maduro in 2017, cutting off the South American nation’s access to U.S. refiners. Crippled by the move and with buyers in India and Spain also shunning its oil, Venezuela resorted to unorthodox tactics. It has been disguising and rebranding the oil in order to hide its origins and circumvent sanctions.

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