US holds off on new Venezuela oil sanctions
The US does not plan to respond to the Venezuelan government's crackdown on the political opposition by imposing tougher sanctions against Caracas' oil sector, a decision that will allow Chevron to maintain its foothold in the country.
Venezuelan president Nicolas Maduro's government has forced his election rival Edmundo Gonzalez to flee the country after issuing an arrest warrant against him earlier this month. The Venezuelan opposition has produced electoral records to show that Gonzalez likely won the 28 July presidential election, a claim backed by Washington.
The US administration today announced sanctions against 16 top Venezuelan officials, including members of the Venezuelan election authority and judges who issued warrants for arrests of opposition leaders. "Rather than respecting the will of the Venezuelan people as expressed at the ballot box, Maduro and his representatives have falsely claimed victory while repressing and intimidating the democratic opposition in an illegitimate attempt to cling to power by force," US secretary of state Tony Blinken said.
Notably absent from today's action is the one measure that US lawmakers from both parties urged the administration to undertake — rescinding permission for Chevron to continue shipping crude to the US produced in its joint venture with PdV. Chevron's Venezuela production averaged 200,000 b/d in July.
"We are also very focused on the enforcement of existing sanctions, as well as evaluating how best to calibrate our sanctions policy towards Venezuela in light of overall US interests," a senior US official told reporters today.
Much of the Venezuelan oil sector is already subject to US sanctions, forcing PdV to rely on shadow fleet tankers and intermediaries to channel exports to buyers in China's Shandong region. Chevron and some other international companies have exemptions from sanctions allowing them to load Venezuelan crude, but those exports typically are made under crude-for-debt arrangements.
No matter how limited, Chevron's presence in Venezuela has provided a talking point for congressional Republicans, who contend that President Joe Biden's administration is suppressing the US oil industry while relying on imports from Venezuela and other dictatorial regimes. US crude imports from Venezuela averaged 194,000 b/d in January-June, according to the Energy Information Administration.
Senior Democratic lawmakers separately called for the US to step up its oil sanctions. "The Maduro regime clings to power using oil revenues dependent on US involvement," Senate majority whip Dick Durbin (Illinois) said on 9 September. Durbin has introduced a bill to compel the White House to end all oil-related investment and trade with Venezuela.
The senior US official defended the use of individual sanctions as an appropriate response to the Maduro crackdown. "When they see their name as an individual on the [US] sanctions list, today is not a good day," the official said. "We believe that this should prompt deeper reflection of officials aligned with Maduro about how far they want to go down this path of facilitating a blatant effort to cling to power."
Efforts by the US and Venezuelan opposition leaders to persuade Maduro's senior aides to abandon his cause have not paid off to date, despite the promise of sanctions relief or immunity from prosecution.
But US officials appear to believe they still have time to figure out the best combination of diplomacy and sanctions to enable a power transition in Venezuela before Maduro's current term expires in January.
Related news posts
US Gulf refiners report no serious storm damage: Update
US Gulf refiners report no serious storm damage: Update
Adds detail on Shell, Citgo, Chevron and ExxonMobil refinery operations. Houston, 12 September (Argus) — Refined products supply in Louisiana appears stable and largely unaffected by Hurricane Francine which made landfall last night as a Category 2 hurricane on the US Gulf coast. Fuel terminals and racks distributing gasoline, diesel and jet fuel in the state were largely unaffected, sources said this morning. Some terminals shut loadings during the peak of the storm late Wednesday and in the early hours of Thursday but were back online or restoring operations today. ExxonMobil's 523,000 b/d Baton Rouge refinery is operating as normal and supplying customers, a company spokesperson said today. "There appears to be no significant damage or flooding at our Baton Rouge area facilities," the spokesperson said. Oil major Shell also said today that there appears to be no serious damage at its Geismar chemicals plant, mothballed Convent refinery and 234,000 b/d Norco refinery in Louisiana. Before the storm, Shell limited personnel at the three plants as it prepared for landfall from Francine. Refineries often have "ride out" crews in place during a major weather event and a smaller number of essential operators continue to oversee the plant. Directly across the Mississippi River from Exxon, BP evacuated staff on Wednesday at a lubricants plant it operates in Port Allen. In far west Louisiana, Citgo's 455,000 b/d Lake Charles refinery faced no damage and is returning to normal operations, the company said today. To the east of Louisiana and closer to the storm's path, Chevron's 357,000 b/d Pascagoula, Mississippi, refinery is operational and supplying customers, the company said today. While details of damages could still emerge for plants in Louisiana run by the likes of Marathon Petroleum, PBF, Valero and Delek, market participants this morning said they expect a return to normal for operations in the coming days. With peak summer demand season over , refiners cutting runs due to narrow margins and the fall turnaround season underway , market participants were less worried about refineries curtailing operations or shutting terminals headed into Hurricane Francine compared to Hurricane Beryl earlier this summer. Beryl also threatened the Texas coast, home to 6mn b/d of refining capacity — about a third of the US total — compared to Louisiana's 3mn b/d. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Francine shuts in about 42pc of US Gulf oil: Update
Francine shuts in about 42pc of US Gulf oil: Update
Adds BSEE shut-in data update. New York, 12 September (Argus) — Hurricane Francine, which has since weakened to a tropical depression as it passes over central Mississippi, shut in about 42pc of US Gulf of Mexico oil output. About 730,472 b/d of offshore oil output was off line as of 12:30pm ET Thursday, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 991.68mn cf/d of natural gas production, or 53pc of the region's output, was also off line. Operators evacuated workers from 169 platforms this week ahead of the storm. Companies including Chevron, ExxonMobil and Shell relocated offshore workers and suspended some drilling operations ahead of Francine, while a number of ports, including New Orleans, Louisiana, shut down. Shell curtailed output at the Appomattox platform, around 80 miles south east of Louisiana, as well as the Mars, Vito, Ursa, and Olympus platforms because of downstream issues. Today Shell said it has started to redeploy staff to its Perdido facility, located about 190 miles south of Houston, where production is still shut. Operations at Shell's Auger and Enchilada/Salsa assets, about 120 miles south of Vermillion Bay, Louisiana. remain suspended. Drilling is still halted at the Whale platform, which is scheduled to start up later this year. "As conditions continue to improve, we will begin the process of redeploying personnel to Auger and Enchilada/Salsa to bring staffing to normal operating levels," Shell said. The port of Lake Charles reopened to vessel traffic at 11am ET Thursday after closing on Tuesday evening. The port of New Orleans remained closed. Francine was about 15 miles north-northeast of Jackson, Mississippi, as of a 12pm ET advisory from the National Hurricane Center, with maximum sustained winds of 35mph. It slammed into the Louisiana coast as a Category 2 hurricane Wednesday evening before weakening. By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf fuel infrastructure stable post-hurricane
US Gulf fuel infrastructure stable post-hurricane
Houston, 12 September (Argus) — Refined products supply in Louisiana appears stable and largely unaffected by Hurricane Francine which made landfall last night as a Category 2 hurricane on the US Gulf coast. Fuel terminals and racks distributing gasoline, diesel and jet fuel in the state were largely unaffected, sources said this morning. Some terminals shut loadings during the peak of the storm late Wednesday and in the early hours of Thursday but were back online or restoring operations today. Before the storm, oil major Shell said limited personnel were working at its Geismar chemicals plant, mothballed Convent refinery and 234,000 b/d Norco refinery in Louisiana on Wednesday as the facilities prepared for landfall from Francine. Refineries often have "ride out" crews in place during a major weather event and a smaller number of essential operators continue to oversee the plant. BP evacuated staff on Wednesday at a lubricants plant it operates in Port Allen. Directly across the Mississippi River, ExxonMobil's 523,000 b/d Baton Rouge refinery was preparing for severe weather, but was operating and meeting customer commitments on Wednesday, prior to landfall. Other refiners with operations in Louisiana such as Marathon Petroleum, Chevron and Citgo had their eyes on the storm as it headed towards the coast. While details of damage at plants could still emerge, market participants this morning said they expect a return to normal for operations in the coming days. With peak summer demand season over , refiners cutting runs due to narrow margins and the fall turnaround season underway , market participants were less worried about refineries curtailing operations or shutting terminals headed into Hurricane Francine compared to Hurricane Beryl in the summer. Beryl also threatened the Texas coast, home to 6mn b/d of refining capacity — about a third of the US total — compared to Louisiana's 3mn b/d. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
IEA cuts global refinery runs forecast
IEA cuts global refinery runs forecast
London, 12 September (Argus) — The IEA has trimmed its forecast for global refinery runs in 2024-25 as weakening refining margins weigh on throughput. In its latest Oil Market Report (OMR), the IEA said it expects global crude throughput at 83mn b/d this year, down from its previous projection of 83.3mn b/d. The agency puts throughput in 2025 at 83.7mn b/d, down from 83.9mn b/d previously. Economic run cuts are expected in the second half of this year as a result of a deterioration in refining margins, the IEA said. Some operators may not cut runs quickly enough in concert with other refiners to support margins, it said, although it noted that Atlantic basin refinery turnarounds this autumn should boost refined product values. The IEA forecasts that refinery runs will contract by 100,000 b/d each in OECD and non-OECD Europe this year compared with 2023, as refineries in the region temper throughput to support margins. Throughput in the former Soviet Union is projected to fall by 200,000 b/d, partly reflecting planned maintenance at Russian refineries in September and a power-related outage at Belarus' 240,000 b/d Mozyr refinery. The agency expects Chinese throughput to drop by 450,000 b/d in 2024, as lacklustre margins prompt independent refiners in Shandong to rein in activity. Chinese throughput declined by 960,000 b/d on the year in July alone, the IEA said. But an uptick in run rates may emerge ahead of the Golden Week holidays at the start of October and a seasonal peak in construction activity at the end of the third quarter, it added. Non-OECD runs are forecast to increase by 640,000 b/d this year, underpinned by new refineries in the Middle East ramping up throughput. The IEA now expects Middle East crude runs to rise by 800,000 b/d this year compared with 2023, which is 200,000 b/d more than its previous projection last month. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more