TO much surprise, the us announced that sanctions against companies trading in Venezuelan oil will be dropped, reports London's Tankers International.
Chinese independent refineries will lose access to cheap Venezuelan oil and may attempt to increase purchases of discounted Iranian and Russian barrels.
This also provides an opportunity for a reshuffling of oil movements, particularly in the Atlantic basin, and with that comes a renewed focus on VLCC employment and impacts on the 'dark fleet'.
As its sanctions are removed, Venezuela can produce and export its oil freely. Discounts on the price of its crude will likely disappear, turning a significant amount of oil away from the dark trade and into mainstream markets.
The sanctions are lifted for six months in place on the sanctions relief to ensure that the Venezuelan government lives up to its end of the bargain to allow free and fair elections next year.
The oil sector in Venezuela has been heavily impacted by the sanctions, which have been in place since 2019. Oil production has dropped from highs of 2.5 million barrels per day to current levels of around just 800,000 barrels per day.
The sector has suffered from years of under-investment and mismanagement, and any production ramp-up is unlikely to be quick. Forecasting agencies anticipate a limited recovery in oil production, but most agree that we will see a significant change to the flows from Venezuela.
A significant impact on the very large crude carrier market will come from current Venezuelan crude receivers having to find alternative supplies.
SeaNews Turkey
Chinese independent refineries will lose access to cheap Venezuelan oil and may attempt to increase purchases of discounted Iranian and Russian barrels.
This also provides an opportunity for a reshuffling of oil movements, particularly in the Atlantic basin, and with that comes a renewed focus on VLCC employment and impacts on the 'dark fleet'.
As its sanctions are removed, Venezuela can produce and export its oil freely. Discounts on the price of its crude will likely disappear, turning a significant amount of oil away from the dark trade and into mainstream markets.
The sanctions are lifted for six months in place on the sanctions relief to ensure that the Venezuelan government lives up to its end of the bargain to allow free and fair elections next year.
The oil sector in Venezuela has been heavily impacted by the sanctions, which have been in place since 2019. Oil production has dropped from highs of 2.5 million barrels per day to current levels of around just 800,000 barrels per day.
The sector has suffered from years of under-investment and mismanagement, and any production ramp-up is unlikely to be quick. Forecasting agencies anticipate a limited recovery in oil production, but most agree that we will see a significant change to the flows from Venezuela.
A significant impact on the very large crude carrier market will come from current Venezuelan crude receivers having to find alternative supplies.
SeaNews Turkey
