Vitol and Trafigura are offering Venezuelan crude to refiners in China and India for March delivery, trade sources told Reuters on Monday, days after two of the world’s biggest independent oil traders obtained special U.S. licenses to help market Venezuela’s oil.
At the request of the US government, Trafigura and Vitol are providing logistical and marketing services to facilitate the sale of Venezuelan oil, Trafigura said on Friday, following a meeting of oil industry executives with U.S. President Donald Trump at the White House.
Trafigura operates in full compliance with applicable sanctions and holds all necessary licenses to perform these transactions, the trader added.
While the big U.S. oil companies are reluctant to commit billions of dollars of investments to restore Venezuela’s oil industry, with Exxon’s CEO Darren Woods saying Venezuela is currently “uninvestable”, the world’s biggest traders jumped at the opportunity to help trade Venezuelan oil.
At the White House meeting, Trafigura’s CEO Richard Holtum told President Trump that the commodity trading group is working “to bring that Venezuelan oil to the United States,” adding that the first vessel “should load in the next week.”
Vitol and Trafigura are now in talks with Chinese and Indian refiners to sell cargoes of Venezuelan crude for delivery in March, according to Reuters’ sources.
Vitol, the world’s biggest independent oil trader, has approached Indian state-controlled refiners to offer the crude at a discount of $8-$8.50 per barrel versus ICE Brent on a delivered basis, one of the sources told Reuters.
Vitol and Trafigura have also contacted PetroChina about potential interest in Venezuela’s flagship heavy sour crude Merey, which was a staple with the Chinese state oil giant before the U.S. sanctioned Venezuela’s exports during President Trump’s first term in office.
Last week, the global head of Trafigura’s oil division, Ben Luckock, told Bloomberg that “I think everyone is looking at what opportunities there may be in Venezuela.”
The prospect of imminent unfreezing of Venezuela’s oil flows offset early on Monday the rising geopolitical risk premium from the protests in Iran and rhetoric from the U.S. and Iran on the escalating protests and regime violence against protesters.
By Charles Kennedy for Oilprice.com
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