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US reimposes Venezuela oil sanctions

  • Market: Crude oil
  • 17/04/24

The US administration today reimposed sanctions targeting Venezuela's oil exports and energy sector investments and set a deadline of 31 May for most foreign companies to wind down business with state-owned PdV.

The US decision rescinds a sanctions waiver issued last October, which allowed Venezuela to sell oil freely to any buyer and to invite foreign investment in the country's energy sector. The waiver, which was due to expire on 18 April, was tied to Caracas' agreement to hold a competitive presidential election and to allow opposition politicians to contest it.

Venezuelan president Nicolas Maduro's government reneged on that deal by refusing to register leading opposition candidate Maria Corina Machado or an alternative candidate designated by her, a senior US official said. The US considered the potential effects on global energy markets and other factors in its decision, but "fundamentally, the decision was based on the actions and non-actions of the Venezuelan authorities," the official said.

The separate waivers granted to Chevron and to oil field service companies Halliburton, SLB, Baker Hughes and Weatherford will remain in place. Chevron will be allowed to continue lifting oil from its joint venture with PdV, solely for imports into the US.

US-bound Venezuelan crude volumes averaged 133,000 b/d last year. Chevron said its Venezuela output was 150,000 b/d at the end of 2023. Argus estimated Venezuela's crude output at 850,000 b/d in March, up by 150,000 b/d on the year.

PdV said it will seek to change terms of its nine active joint ventures, starting with Spain's Repsol, in an effort to boost production.

The reimposition of sanctions will primarily affect Venezuelan exports to India and China. India has emerged as a major new destination for Venezuelan crude since the US lifted sanctions in October, importing 152,000 b/d in March. There are two more Venezuelan cargoes heading to India and are expected to arrive before the 31 May deadline. The VLCC Caspar left the Jose terminal on 14 March and was expected to arrive at a yet-unknown west coast Indian port on 26 April. The Suezmax Tinos left Venezuela on 18 March and was due at Sikka on 30 April.

By contrast, Chinese imports of Venezuelan Merey, often labeled as Malaysian diluted bitumen, have been lower since October. Independent refiners in Shandong, which benefited from wide discounts on the sanctioned Venezuelan crude, cut back imports to just a fraction of pre-relief levels. By contrast, state-controlled PetroChina was able to resume imports. The Merey discount to Brent already widened in anticipation of a possible reimposition of US sanctions.

Reprieve expected for European companies

Separate US authorizations previously issued to Repsol and to Italy's Eni to allow oil-for-debt deals with PdV and to enable a Shell project to import natural gas from Venezuela's Dragon field to Trinidad and Tobago are expected to remain in place.

The US sanctions enforcers as a rule do not disclose the terms of private sanctions licenses, and the European companies were not immediately available to comment. The US would still consider future requests for sanctions waivers for specific energy projects, another senior official said.

Repsol imported 23,000 b/d of Venezuelan crude into Spain last year and 29,000 b/d so far this year, according to Vortexa data. The last cargo to arrive was on 15 April.

Hope springs eternal

The US administration says it will consider lifting the sanctions again if Maduro's government allows opposition candidates to participate in the July presidential election.

The US action today "should not be viewed as a final decision that we no longer believe Venezuela can hold competitive and inclusive elections," a third senior official said. "We will continue to engage with all stakeholders, including Maduro representatives, the democratic opposition, civil society and the international community to support the Venezuelan people's efforts to ensure a better future for Venezuela."

Chinese imports of Venezuelan crude

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26/02/25

Trump to revoke Chevron's Venezuela oil license: Update

Trump to revoke Chevron's Venezuela oil license: Update

Updates with reaction from Chevron, other details. Washington, 26 February (Argus) — US president Donald Trump said today he will revoke a 2022 Venezuela sanctions waiver, most likely referring to Chevron's authorization to lift crude cargoes from its joint venture with Venezuelan state-owned PdV. Trump did not explicitly reference Chevron, but his description of the waiver from Venezuela sanctions he said he was revoking matches the US major's authorization date and terms. The Chevron authorization would not be renewed on 1 March, Trump said. "We are aware of today's announcement and are considering its implications," Chevron said, adding that it "conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by US government." The 26 November 2022 authorization for Chevron was auto-renewed every month and allowed the company to operate in Venezuela for a six-month period after each renewal. Since Trump noted that he would not renew the license on 1 March, the terms of that license in theory allow Chevron to continue operations in Venezuela until 1 August. Chevron expects the six-month wind-down period to remain in place, a source close to the company's Venezuela operations said. The US Treasury Department has yet to confirm details of the new Venezuela sanctions regime as described by Trump. Former president Joe Biden's administration allowed Chevron to resume cargo loadings from Venezuela, only for imports into the US, in October 2022, as part of a deal with Venezuelan president Nicolas Maduro's government to encourage holding free elections. The US imported 222,000 b/d of crude from Venezuela in January-November 2024, US Energy Information Administration data show. While insignificant for total US crude imports, Venezuela cargoes amounted to about 10pc of Chevron's global liquids output as of last year. Chevron's Venezuela presence did not result in major financial gains for Caracas. But it allowed PdV to stabilize and then grow Venezuela's crude output. Venezuela's crude production, including liquids and condensates, held at about 1.04mn b/d in January, according to PdV. Chevron was among a handful of western companies allowed to draw crude cargoes from Venezuela, but on terms that precluded direct cash payments to PdV. Independent refiners in China are the primary customers for Venezuelan Merey crude, imported through a network of ships, agents and brokers established to circumvent US sanctions. The scheme resulted in significant discounts for Chinese buyers of Merey, which traded at discounts ranging from $6.50-7/bl against May Ice Brent, for March arrival. Migration pipeline The Trump administration appeared willing to retain the Chevron authorization as long as the Maduro government cooperated on accepting Venezuelan nationals deported from the US. Trump's envoy Ric Grenell traveled to Caracas last month to discuss cooperation on migrants, and he suggested over the weekend that the US was no longer interested in a change of Venezuela's government. But Trump said today that the Maduro government "has not been transporting the violent criminals that they sent into our Country (the Good Ole' U.S.A.) back to Venezuela at the rapid pace that they had agreed to." Trump's Republican allies in Congress hailed his decision, describing the Chevron authorization as a "Biden oil deal". The Republicans hold a narrow 218:215 majority in the US House of Representatives, with two vacant seats in Florida that in November elected Republican lawmakers who since resigned. US relations with Venezuela are a key political issue in Florida, which is home to many Americans of Cuban and Venezuelan descent. Caracas blasted Trump's decision, with Venezuela's vice-president Delcy Rodriguez saying in a social media post that "these kinds of failed decisions prompted the migration from 2017 to 2021 with the widely known consequences." PdV and Venezuela's oil ministry declined to comment. By Haik Gugarats and Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Canada-Mexico tariff threat leaves industry guessing


26/02/25
News
26/02/25

Canada-Mexico tariff threat leaves industry guessing

Calgary, 26 February (Argus) — Threatened US tariffs on Canadian and Mexican imports have thrown North American commodity markets into turmoil, both because of the scope of the proposals and the lack of details on how they might work. The information vacuum created by the US in between declarations from President Donald Trump has left commodity producers, consumers and traders unsure how to prepare. The Treasury Department and Customs and Border Control are not providing guidance on how a 10pc tariff on Canadian energy and 25pc tariff on all Mexican imports — currently set to come into effect on 4 March at 12:01am ET — would actually be administered. Reaction to the unknowns have varied from one company and politician to the next. Below are some of their comments: Refining: "There is no easy, fit-for-purpose replacement for this [Canadian] crude oil," the American Fuel and Petrochemical Manufacturers (AFPM) , which advocates for many US refiners, said on 27 November. Western Canadian crude will continue to flow to US refiners, but at a greater discount if President Donald Trump enacts tariffs on imports from that country, Phillips 66 executive vice president of commercial Brian Mandell said on 31 January. But "crack margins will also have to do some work" in the Rocky Mountain and midcontinent regions, where refiners have fewer alternative supplies. Tariffs would lead to price increases and most of these "will ultimately be borne by the producer" and to a lesser extent the consumer, said Marathon Petroleum chief executive Maryann Mannen said on 4 February. If threats for US tariffs on Canadian crude were to eventually go through, the cost would be split between producers, refiners and customers, Delek chief executive Avigal Soreq said on 6 February. It is a dynamic scenario and "very difficult to predict what will happen to margins on the northern tier," BP chief executive Murray Auchincloss said on 11 February. The tariffs would cause a sizable disruption and "have some impact on throughput," US independent refiner PBF Energy chief executive Matthew Lucey said on 13 February. Switching to alternative crudes would lead to lower yields of gasoline, diesel and other fuels because refineries are optimized around a certain type of crude, he said. US independent refiner HF Sinclair has "the ability to lighten up" and switch to alternative crudes if impending US tariffs on Canada go into effect next month, HF Sinclar commercial vice president Steven Ledbetter said on 20 February. Upstream: "A 25pc tariff on oil and natural gas would likely result in lower production in Canada and higher gasoline and energy costs to American consumers while threatening North American energy security," Canadian Association of Petroleum Producers (CAPP) president Lisa Baiton said on 26 November. "Canada's regulatory uncertainty, negative investment climate and the continued implementation of harmful policies has positioned Canada in a weak negotiating position with a lack of diversity in market access," said the Explorers and Producers Association of Canada (EPAC) on 16 January. "We don't know what's going to happen with tariffs and I don't have any unique insight," Imperial Oil chief executive Brad Corson said on 31 January. "I'm hopeful that as we move forward, diplomacy will prevail and we will end up with no tariffs, no restrictions on energy flow." "All the work we've been doing over the last eight years has been to drive our production to the low end of the cost of supply curve," ExxonMobil chief executive officer Darren Woods said on 31 January. "None of that's going to change with tariffs." "I would say that I don't know that anyone on the planet knows exactly what's going to happen on tariffs," Suncor chief executive Rich Kruger said on 6 February. If tariffs were to be implemented, it is "pretty difficult" to say exactly who would carry the burden -- producers or buyers, said Andy O'Brien, ConocoPhillips senior vice president for strategy, commercial, sustainability and technology on 7 February. "The refiners in the Midwest and the Rockies have less options to substitute versus, say, the Gulf coast or the west coast refiners," O'Brien said. "It's not really clear to us who's going to pay which portion of the tariff," said Cenovus chief executive Jon McKenzie on 20 February. "If we are in a world, unfortunately, in March, where tariffs do come, we will watch those price signals and react accordingly." Cenovus executive vice president of commercial Geoff Murray expects that tariffs would drive "as much volume as possible" through the 890,000 b/d Trans Mountain system to Canada's west coast, destined for global markets rather than California, which currently takes about half of the pipeline's exported volume. Midstream: "If [the tariffs] do come in . . . that product is still going to be needed," said Enbridge chief executive Greg Ebel on 6 January. "It is not my preferred route, but the product will flow." Trans Mountain has seen a "flurry of activity" in booking westbound pipeline capacity since US president Donald Trump's administration announced its intent to slap tariffs on imports, said Trans Mountain senior director of business development Jason Balasch on 7 February. "The tariffs have opened all level of government's eyes to talk of expansions." "We fully expect that under all Canada-US trade relations outcomes, Canadian oil will continue to flow south," Enbridge chief executive Greg Ebel said on 14 February. "We've got tariff concerns out there, but there's such a hard wiring of the energy system in North America, we just don't see that as a material impact." "We thought that was a little bit further out," Gibson Energy chief executive Curtis Philippon said of a potential expansion of tankage near the inlet of the Trans Mountain pipeline system on Canada's west coast on 19 February. The midstream company commissioned two 435,000 bl tanks at the Edmonton terminal in December and tariff threats seem to have expedited talk on adding two more. Trading: "The fact that the initial tariffs around Canada and Mexico were so punitive at 25pc, how someone handles that risk ... is extremely difficult," said Equinor vice president of crude trading and refinery optimization Simon James on 6 February. "I think that's something the market is starting to work through and I don't think there's a good answer yet." "For us as traders, it also creates market opportunity, but it certainly does create a lot of market uncertainty," said Chevron vice president of crude supply and trading Barbara Harrison on 6 February. "Already today, traders and people who are trying to connect the dots, are looking into how they should change their buying patterns," SOCAR chief trading officer Taghi Taghi-Zada said on 6 February. While the actual imposition of tariffs would be an important milestone, he said, the fact people are speaking about them with confidence has already affected the markets. Politicians: "[The federal government] will have a national unity crisis on their hands at the same time as having a crisis with our US trade partners," Alberta premier Danielle Smith said on 13 January in response to the suggestion Canada was considering cutting off energy flows to the US in retaliation to tariffs. "Everything is on the table," Canadian prime minister Justin Trudeau said of his tariff retaliation plans on 15 January. "The point in [Canada's] response is to apply political pressure," said Canada's minister of energy and natural resources Jonathan Wilkinson on 15 January. Canada will likely focus on goods that are "important to American producers," but also those for which Canada has an alternative. Alberta premier Danielle Smith on 16 January called on Canada to "immediately start construction on the Northern Gateway and Energy East pipelines" to decrease the country's reliance on US customers in the wake of threatened tariffs by president-elect Donald Trump. There is no active proposal for either pipeline. "We've been here before," said Canadian prime minister Justin Trudeau on 21 January, citing Trump's first term in office that challenged the trading relationship both sides were able to work through. "Our focus is remaining calm." "If the president does choose to implement any tariffs against Canada, we are ready with a response," said Canadian prime minister Justin Trudeau on 31 January. "A purposeful, forceful, but reasonable, immediate response." "US-based businesses will now lose out on tens of billions of dollars in new revenues," Ontario premier Doug Ford said on 3 February as he banned US companies from provincial contracts. "They only have President Donald Trump to blame." "[Heavy Canadian oil] is by far the most affordable option for American companies and consumers, and it enables the export of US light crude to countries around the world, creating additional profit for American companies but also creating additional tools to be used in the context of geopolitics," said Canada's energy and natural resources minister Jonathan Wilkinson on 4 February. "In Canada, this has caused some reflection on whether perhaps in some areas we are too dependent on infrastructure in particular that flows only through the United States ... certainly in the areas like oil, we flow almost all of it this way," said Canada's energy and natural resources minister Jonathan Wilkinson on 4 February. "Working families across the country are being put in the crosshairs of Trump's policies with our trade partners," Illinois governor JB Pritzker said on 10 February. "Get the Keystone pipeline in place. Now whether he wants, the president, wants to charge tariffs to Canada, that's something that can be negotiated deal by deal," US representative Randy Weber (R-Texas) said on 25 February. Analysts: The US' trade deficit with Canada is largely a result of America's thirst for energy and should not be confused with a "subsidy", economists at TD Bank said on 21 January. "I don't think Trump actually wants tariffs on Canada or Mexico," said Kpler economist Reid I'Anson on 5 February, noting Trump was quick to get on the phone with the two countries, but not so much with China. "The extent of the price impact depends on one's locations, but certainly seems to me that the consumer will be paying more for energy," said Lipow Oil Associates president and industry analyst Andrew Lipow on 27 November. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Illinois River lock reopening delayed: Corps


26/02/25
News
26/02/25

Illinois River lock reopening delayed: Corps

Houston, 26 February (Argus) — The US Army Corps of Engineers (Corps) delayed the reopening of the Lockport Lock along the Illinois River by over a month after finding significant cracks in the lower gate walls. The Corps now estimates the lock to resume operations between 30 April and 6 May at the earliest. The Lockport Lock was previously scheduled to reopen on 25 March , after the two gates on the upper end of the lock were replaced. When the Corps dewatered the lock chamber earlier this month, severe cracks were found in both the lower gates. The Lockport Lock grants access to major trading hubs Chicago, Illinois, and Burns Harbor, Indiana, at the end of the Illinois River. The lock has been closed since 28 January. Major barge carriers had already planned transit routes for the previous reopening timeline of the Lockport Lock. These dates have been paused until April, instead of late February. The delayed timeline will prolong shipment of major products such as metals, asphalt, petcoke, fertilizer and biofuels. Another 5-6 weeks of work will be required for replacement of the lower gate walls, said the Corps. Both lower gates need to be pulled, and there are no spare castings for the Lockport gates, incurring an extended timeline. A different heavy lift crane must be brought in and funding must be acquired for the additional interim and permanent repairs, said the Corps. Work has already begun for replacement of the upper gates, including bulkheads, rebar installation and upper gates pulled into the chamber. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump to revoke Chevron's Venezuela oil license


26/02/25
News
26/02/25

Trump to revoke Chevron's Venezuela oil license

Washington, 26 February (Argus) — US president Donald Trump said today he will revoke a 2022 authorization for Chevron to lift crude cargoes from its joint venture with Venezuelan state-owned PdV. Trump did not explicitly reference Chevron, but his description of a waiver from Venezuela sanctions he said he was revoking matches the US major's authorization date and terms. The Chevron authorization would terminate on 1 March, Trump said. The company was not immediately available to comment. Former president Joe Biden's administration allowed Chevron to resume cargo loadings from Venezuela, only for imports into the US, in October 2022, as part of a deal with Venezuelan president Nicolas Maduro's government to encourage holding free elections. The US imported 222,000 b/d of crude from Venezuela in January-November 2024, US Energy Information Administration data show. While insignificant for total US crude imports, Venezuela cargoes amounted to about 10pc of Chevron's global liquids output as of last year. Chevron's Venezuela presence did not result in major financial gains for Caracas. But it allowed PdV to stabilize and then grow Venezuela's crude output. Venezuela's crude production, including liquids and condensates, held at about 1.04mn b/d in January, according to PdV. The Trump administration appeared willing to retain the Chevron authorization as long as the Maduro government cooperated on accepting Venezuelan nationals deported from the US. Trump's envoy Ric Grenell traveled to Caracas last month to discuss cooperation on migrants, and he suggested over the weekend that the US was no longer interested in a change of Venezuela's government. But Trump said today that the Maduro government "has not been transporting the violent criminals that they sent into our Country (the Good Ole' U.S.A.) back to Venezuela at the rapid pace that they had agreed to." The US Treasury Department has yet to confirm details of the new Venezuela sanctions regime as described by Trump. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump teases 25pc tariff on imports from EU


26/02/25
News
26/02/25

Trump teases 25pc tariff on imports from EU

Washington, 26 February (Argus) — The US' imports from the EU could be subject to a 25pc tariff, possibly as early as 2 April, President Donald Trump said today. "We have made a decision and we will be announcing it very soon," Trump told reporters invited to observe his first Cabinet meeting at the White House. "It will be 25pc generally speaking, and that will be on cars and all the other things." Trump upon taking office ordered US government agencies to examine the causes of US trade deficits and to propose tariffs and other measures to reduce them — the first step in a process guaranteed to result in tariffs on key US trading partners. Trump set 1 April as the deadline for that report, but he now says he would avoid connotations with April Fools' Day and set the tariff process in motion on 2 April. Even without additional actions, the US and the EU are set on a course for trade confrontation. Trump ordered a 25pc tariff on all imported steel and aluminum to go into effect on 12 March. Trump on 21 February also ordered his administration to come up with retaliatory taxes and tariffs in response to taxes assessed by the EU and other foreign jurisdictions on American social media and technology providers. Trump previously mentioned the likelihood of 25pc taxes on imports of automobiles and pharmaceuticals from the EU. The scope of products covered by new tariffs is not yet clear. "We have about a $300bn deficit with the EU," Trump said. "The EU was formed in order to screw the US. That's the purpose of it, and they've done a good job of it." The US ran a $236bn deficit in trade in goods with the EU last year, US customs data show. The EU will retaliate against US products if Trump proceeds with his tariff plans, European Commission president Ursula von der Leyen said earlier this month. "Unjustified tariffs on the EU will not go unanswered," she said. "We will use our tools to safeguard our economic security and interests, and we will protect our workers, our businesses and consumers at every turn." Trump today downplayed the possible retaliation by Brussels. "They can retaliate, but it cannot be a successful retaliation," he said. "We are the pot of gold that everybody wants." Trump separately suggested that 2 April is also the new implementation day for his broad tariffs on imports from Canada and Mexico. But commerce secretary Howard Lutnick corrected him, and said that the current plan to impose tariffs on Canada and Mexico will go on into effect on 4 March. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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