Commodity trading major Vitol is planning to establish a presence in Venezuela amid a surge in interest in the country’s oil wealth from the resources industry, Reuters has reported, citing unnamed sources.
Vitol is already exporting Venezuelan crude, following the deal that Caracas struck with the United States after the latter ousted the country’s president, Nicolas Maduro, in January and took him to the U.S. to stand trial for drug trafficking.
Soon after that happened, Vitol and Trafigura struck a deal with the White House to sell 50 million barrels if Venezuelan crude, valued at some $2 billion. Later, the total to be sold by the two commodity majors was hiked twofold, to 100 million barrels.
According to media reports from the time, the biggest target buyers for the Venezuelan oil were Chinese and Indian refiners, with at least some of the oil offered at a substantial discount to Brent crude at the time.
“For many years Vitol has had a strong relationship with PDVSA,” Vitol’s head of Latin America, Henry Medina, told Reuters. “We look forward to building on this and developing additional partnerships in Venezuela, as well as a meaningful presence in the country.”
Venezuela exported an estimated 1.25 million bpd in May, with the United States, India, and Europe emerging as major buyers. Production and exports are seen rising further from this level—which was the highest since 2019 for exports—as energy investors return to the South American country.
The return of international oil firms to Venezuela lays the foundations for a rebound in the country’s oil supply, although it is still a third of the peak level of 3 million barrels per day from more than a decade ago. Demand trends, however, are conducive to production expansion, especially with Middle Eastern supply still disrupted.
By Irina Slav for Oilprice.com
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