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Citgo rivals dig trenches over delinquent debt

  • Market: Crude oil, Oil products
  • 04/11/19

A group of bondholders is urging the White House to untie its hands in an increasingly acrimonious struggle with Venezuela's political opposition over US refiner Citgo, the Opec country's most valuable international asset.

In a statement today, the Venezuela Creditors Committee (VCC) said a 28 October lawsuit by an opposition-appointed board in exile of Venezuelan national oil company PdV is "tantamount to a repudiation" of the company's obligations.

The opposition lawsuit was filed in New York Southern District against two trustees of PdV 2020 bonds that are collateralized by 50.1pc of the shares in Citgo's parent. The objective of the legal action is to obtain a declaration that a 2016 swap that led to the issuance of the overdue 2020 bond is invalid.

The lawsuit came as a surprise to the bondholders, as it was filed on the heels of a 24 October White House order that blocked them from exercising their right to the PdV 2020 collateral of Citgo shares for a 90-day period, ending 22 January 2020.

The US government action was widely seen as an effort to get both sides to reach a consensual agreement on the controversial bond, which had been the only Venezuelan debt not in default until a $914mn principal and interest payment was missed on 28 October.

The "ad hoc" administrative board of PdV was named by Juan Guaido, the Venezuelan opposition leader who is recognized by more than 50 Western nations as the country's interim president. While the US government gave its blessing to Guaido's administrative control over Citgo after he declared his interim presidency on 23 January, PdV itself is still controlled by Venezuela's incumbent president Nicolas Maduro, who has resisted a 10-month US-backed campaign to oust him. Maduro is still recognized as Venezuela's head of state by the UN, as well as Russia, China, Turkey and Cuba, among other nations.

In its statement today, the VCC said the Maduro opponents' legal actions "stand in stark contrast to their commitment to an orderly and consensual renegotiation of Venezuela's public external debt" that they had pledged to fulfill in debt guidelines issued three months ago.

The ad hoc PdV board and Guaido's debt committee have not responded to today's VCC statement.

The committee added that the lawsuit was "unnecessary" because in the months prior to the October missed payment deadline, it offered on "numerous occasions to facilitate a consensual refinancing" of the 2020 Bonds with the express purpose of ensuring that Venezuela could preserve its ownership of Citgo pending a consensual restructuring of Venezuela's public external debt. But the Guaido government declined to acknowledge or respond to the offer of assistance, the committee said.

The VCC goes on to reject the Guaido board's argument that the debt is invalid because the 2016 swap lacked approval by the opposition-controlled National Assembly, and calls on the Guaido team to reverse course if it wants an orderly and consensual outcome.

"If the Guaido Government is intent on seeking the nullity of the 2020 Bonds, then it is only fair that the holders of these Bonds be able to defend and pursue their rights in full," the VCC said. "US policy should not support the repudiation of debt nor deprive a party of its ability to defend its interests while a dispute is before US courts."

The battle over Citgo is escalating as Guaido loses political support inside Venezuela, where Maduro has clung to power in spite of a severe economic hardship that his allies blame on US sanctions.

The main opposition coalition led by Guaido is lobbying for tighter sanctions by the US and the EU to pressure Maduro to step down.

The US imposed oil sanctions on Venezuela in late January, days after Guaido emerged as leader of the opposition movement that has since fragmented and lost momentum amid rising frustration. Guaido has called for a mass mobilization in Venezuela on 16 November, but it is not clear that he has enough support to muster a turnout on the scale that Venezuela witnessed in the weeks after he declared his authority.


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11/04/25

Fujairah biofuel uptake lags despite EU rules push

Fujairah biofuel uptake lags despite EU rules push

Dubai, 11 April (Argus) — Alternative bunker fuels like biofuels have yet to gain significant traction in the UAE port of Fujairah, the world's third-largest bunkering hub, even though EU regulations such as FuelEU Maritime and the EU Emissions Trading System (ETS) are driving demand expectations. Discussions at the S&P Global Commodity Insights FUJCON 2025 this week highlighted a combination of structural and market-driven factors holding back adoption, with limited demand from key vessel types and insufficient infrastructure investment topping the list. The introduction of FuelEU Maritime, which mandates a 2pc reduction in greenhouse gas (GHG) intensity for ships calling at EU ports starting this year, alongside the EU ETS carbon pricing mechanism was expected to spur demand for biofuels in Fujairah. Many vessels refueling in the UAE hub transit to Europe, making compliance with these regulations a potential driver for alternative fuel uptake. A key reason cited is the limited presence of containerships and cruise ships in Fujairah's bunkering market. Globally, these vessel types are the primary consumers of biofuels due to their operators' commitments to decarbonisation and customer-driven sustainability demands. Fujairah's bunkering activity is dominated by bulk carriers and tankers, which have been slower to adopt alternative fuels. "Containerships and cruise ships are leading the charge on biofuels in Singapore and Rotterdam, but they are just not a big part of the mix here," said Fujairah harbour master Mayed Alameeri. "We support the use of green fuels, but without that demand pull, there's little incentive to scale up." This lack of demand has deterred investments in biofuel storage and supply infrastructure. Unlike in Singapore and Rotterdam, where biofuel bunkering is supported by dedicated facilities, Fujairah's infrastructure remains geared toward conventional fuels. "There is no single shipowner who has partnered with a supplier in Fujairah on adoption of alternative fuels," said Hafnia Bunker general manager Kasper Sorensen. "It is very difficult to make a business case for investment." While there have been sporadic inquiries from shipowners over the past year, these have been for small amounts — typically 150-200t — far below the scale needed to spur investment. "You need steady offtake to justify the capex for tanks and blending," a Fujairah supplier said. "Right now, we're not seeing it." Market dynamics also play a role. The price spread between biofuels and conventional fuels remains a hurdle, with Fujairah's B24 blend trading at a significant premium to very low sulphur fuel oil (VLSFO). Mandates need certainty The bunker market is under pressure to decarbonise as the International Maritime Organisation (IMO) targets a 50pc cut in shipping emissions by 2050 from 2008 levels. Alternative fuels are central to this goal, but regulatory disparities complicate investment decisions, industry players said. Regulatory uncertainty adds another layer of caution. While FuelEU's pooling mechanism allows shipowners to offset emissions across fleets, potentially enabling biofuel bunkering in Fujairah to count toward EU compliance, clarity on implementation is limited. Bunker market participants urged the adoption of universal standards for alternative bunker fuels, warning that fragmented regulations are hampering the shift to lower-carbon options. "Shipowners are still figuring out how to navigate these rules which are regionally divergent," said a shipping broker. "Until there's more certainty, many are sticking with what they know." Still, some market participants expressed cautious optimism. Rising inquiries, although sporadic, suggest growing awareness of biofuels' role in meeting EU mandates. "It's not a flood, but it's a trickle that could build," said a bunker trader. For now, Fujairah's biofuel market remains in a holding pattern, waiting for demand signals strong enough to shift the hub's bunkering landscape. By Elshan Aliyev Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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South Korean bitumen exports may head to southeast Asia


11/04/25
News
11/04/25

South Korean bitumen exports may head to southeast Asia

Singapore, 11 April (Argus) — South Korea bitumen exports could start entering southeast Asia in the coming months, following the recent opening of the arbitrage window between the two regions. Export prices from South Korea have declined sharply over the past week, weighed down by early-week declines in upstream crude and high-sulphur fuel oil values. A Yeosu-based refiner concluded an export tender to sell up to four May- and June-loading cargoes on 10 April, which was settled in the range of $375-385/t fob South Korea, according to market participants. Declines in fob Singapore bitumen export pricing have been slower in comparison, as continued production output cuts contributed to curtailed spot supplies. Most refiners in Singapore have fully committed April- and May-loading volumes, although several traders were still holding on to unsold volumes. In contrast, a steady supply of April- and May-loading cargoes has been made available from South Korean suppliers over the past month. One refiner previously released three export tenders in March alone, far more than the typical one per month. Arbitrage economics to export bitumen from South Korea to southeast Asia has grown more favourable, as fob Singapore premiums over that of fob South Korea values widened. Spreads between fob Singapore and South Korea widened to $42.50/t on 10 April, up from $22.50/t a week earlier. This is the widest since November 2024, when fob Singapore prices also traded at premiums of $42.50/t to that of South Korean exports. Traders who won some shipments from the recent South Korean export tender may direct some of these volumes to southeast Asia, rather than sell them to the traditional export destination market of east China. Domestic prices in east China have come under renewed pressure in the week to 11 April, undermined by consecutive day-on-day losses in the bitumen futures market. This, coupled with a weaker yuan against the US dollar, has put a dent on Chinese appetite for South Korean exports. These South Korean exports could eventually be shipped to Vietnam, where demand has been relatively more robust compared with other Asian countries, market participants said. Pricing competition in north Vietnam has intensified in 2025 on increased export supplies from south China. And with South Korean exports likely to join the fray, this could temporarily edge out Vietnam's imports of Singapore-origin bitumen. By Leanne Tan Singapore vs South Korea bitumen price spreads ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Tariff concerns drive US VLSFO to 4-year lows


10/04/25
News
10/04/25

Tariff concerns drive US VLSFO to 4-year lows

New York, 10 April (Argus) — Very low-sulphur fuel oil (VLSFO) monthly averages at four US ports have declined to their lowest levels since 2021, driven by uncertainty surrounding US tariffs. Houston and New Orleans VLSFO monthly averages dropped to $470/t and $491/t, respectively, so far in April. That is the lowest average for Houston since April 2021 and the lowest since February 2021 for New Orleans. New York and Philadelphia VLSFO averages are at $498/t and $510/t, respectively, the lowest since April 2021 for New York and May 2021 for Philadelphia. Bunker market participants have had mixed reactions to the price decline so far. According to one trader, some buyers have been trying to buy bunker fuel with delivery dates for one month from now, to lock in the lower prices, rather than one week out, which is typical when buying bunker fuel in the spot market. Another market contact said they have seen a mixture of elevated buying interest but also some buyers who will hold off waiting to see if prices continue to drop or if the volatility in prices ease as there have been large price swings within the same business day. "I have not seen anything this volatile since the start of the Russia vs Ukraine war," the trader said. Oil futures went up by almost 5pc on 9 April reversing losses from early that morning after US president Donald Trump paused higher punitive tariffs against key trading partners such as the EU and Japan and increased tariffs against China. The wild swing for intraday bunker prices on 9 April , which typically traces Brent crude, lowered market demand. By Luis Gronda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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New tariffs could upend US tallow imports: Correction


10/04/25
News
10/04/25

New tariffs could upend US tallow imports: Correction

Corrects description of options for avoiding feedstock tariffs in 12th paragraph. Story originally published 3 April. New York, 10 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. Other policy shifts affect flows Even as US farm groups clamored for more muscular foreign feedstock limits over much of the last year, tallow had until now largely dodged any significant restrictions. Recent US guidance around 45Z treats all tallow, whether produced in the US or shipped long distances to reach the US, the same. Other foreign feedstocks were treated more harshly, with the same guidance providing no pathway at all for road fuels from foreign used cooking oil and also pinning the carbon intensity of canola oil — largely from Canada — as generally too high to claim any subsidy. But tariffs on major suppliers of tallow to the US, and the threat of additional charges if countries retaliate, could give refiners pause. Demand could rise for domestic animal fats or alternatively for domestic vegetable oils that can also be refined into fuel, especially if retaliatory tariffs cut off global markets for US farm products like soybean oil. There is also risk if Republicans in the Trump administration or Congress reshape rules around 45Z to penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow outside North America is a more manageable price to pay compared to other feedstocks — including a far-greater collection of charges on Chinese used cooking oil. And if the US sets biofuel blend mandates as high as some oil and farm groups are pushing , strong demand could leave producers with little choice but to continue importing at least some feedstock from abroad to continue making fuel. Not all US renewable diesel producers will be equally impacted by tariffs either. Some tariffs are eligible for drawbacks, meaning that producers could potentially recover tariffs they paid on feedstocks for fuel that is ultimately exported. And multiple biofuel producers are located in foreign-trade zones, a US program that works similarly to the duty drawbacks, and have applied for permission to avoid some tariffs on imported feedstocks for fuel eventually shipped abroad. Jurisdictions like the EU and UK, where sustainable aviation fuel mandates took effect this year, are attractive destinations. And there is still strong demand from the US food sector, with edible tallow prices in Chicago up 18pc so far this year. Trump allies, including his top health official, have pushed tallow as an alternative to seed oils. By Cole Martin and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Brazil's diesel market eyes Trump and Petrobras


10/04/25
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10/04/25

Brazil's diesel market eyes Trump and Petrobras

Sao Paulo, 10 April (Argus) — Tensions surrounding whiplash changes in trade policies favored by US president Donald Trump have created favorable conditions for foreign diesel imports into Brazil, just days after state-controlled Petrobras cut its refinery gate diesel prices. On 1 April, Petrobras cut wholesale diesel prices by 4.6pc, bringing the average price to R3,550/m³ (226.86¢/USG) from around R3.720/m³ (237.73¢/USG). Foreign diesel prices had been trending lower than Petrobras' prices for more than a month prior to the announcement. The competitiveness of imported diesel led some retailers to delay the withdrawal of fuel contracted with Petrobras, even at the cost of paying penalties. Petrobras' price reduction made the company's diesel more attractive on the domestic market, but the scenario was short-lived. Within about 24 hours, on 2 April, Trump unveiled so-called "reciprocal tariffs" on products imported from practically all US trading partners, triggering a strong global reaction, and setting the stage for a showdown with China. Investors' concern about recessionary risks clobbered prices for a wide range of commodities traded on the world's stock exchanges. Nymex ultra-low sulfur diesel (ULSD) futures fell more than 10pc between 2-8 April, to a near four-year low. The volatility of the international markets has caused a turnaround in diesel prices on the Brazilian market. The heightened uncertainty led some participants to adopt a more cautious stance, waiting for prices to settle before making firmer decisions. "We are planning imports where we need to cover supply needs, without lengthening our position," said one trader. Between 2-8 April, the price indicator for ex-port land terminal diesel traded on the spot market at Santos, Paranagua, Suape and Itaqui ports fell in relation to Petrobras' basis by R140/m³, R230/m³, R102.5/m³ and R160/m³, respectively. The move followed international volatility caused by trade conflicts, as imported diesel responds to nearly 20pc of all the Brazilian domestic supply. The escalation of trade conflicts led to an interruption in talks between importers and suppliers last week, when both sides took the opportunity to assess the impact of developments on the fuel sector. Around 1.6mn m³ of imported diesel is expected to land in Brazil in April, according to data from shipping agencies and energy analytics firm Vortexa. If realized, the volume would represent a 33pc increase over the same period of 2024. To traders, the surging volume of product available on the domestic market and the wide variation in daily prices between different locations could offer good trading opportunities for importers. The Petrobras factor Market participants are also monitoring Petrobras' behavior in this new context. The price cut at the company's refineries and the subsequent reopening of arbitrage for imports has reinforced the perception that further price cuts are on the company's radar. Deeper cuts would be welcomed by Brazil's federal government, which is locked in a fight against creeping inflation. Rising prices are being blamed for the slipping popularity of President Luiz Inacio Lula da Silva. Diesel has a small influence on the extended national consumer price index IPCA portfolio, at around 0.24pc, but the view is that the fossil fuel has a significant indirect impact on the formation of food prices, which account for 21.87pc of the index. Despite favorable arbitrage for imported product in March, part of the market was surprised by Petrobras' latest price cut. There is a perception among traders that the predictability of the company's decisions has diminished. The company's management has indicated that it will not act while uncertainty in global markets persists. By Marcos Mortari Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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