Trinidad denies supplying fuel to Venezuela

Market: Oil products
07/05/20

Trinidad and Tobago's government is denying any responsibility for the apparent diversion of a gasoline cargo to US-sanctioned Venezuela, which is in the throes of an acute fuel shortage.

The incident highlights political sensitivity surrounding oil trade with Venezuela, and enduring commercial ties between Venezuela's state-owned PdV and nearby islands, even though the oil company has lost most of its nearshore storage and refining assets in recent years.

Inside Trinidad, a controversy has erupted surrounding a 150,000 bl cargo of gasoline purchased by Swiss-based ES Euro Shipping from Trinidad's state-owned Paria Fuel Trading.

According to shipping data, the cargo loaded at Pointe a Pierre in Trinidad aboard the Liberian-flagged medium-range tanker Aldan on 19-21 April, and had been due to arrive at the Dutch Caribbean island of Aruba around 6 May. The vessel is currently out of range, according to multiple shipping tracking services, and is widely believed to be in Venezuelan waters.

The tanker's previous registered port of call was PdV's Amuay terminal in western Venezuela on 13-14 March.

"The contract and the bill of lading for that shipment both stipulated Aruba as final destination with all restrictions included," Trinidad's energy minister Franklin Khan said. "When the shipment lands in Aruba, which is when the contract has been fully served, and it is loaded on to some terminal in Aruba, we have lost title to the supply."

He added that "if some of that shipment eventually reached Venezuela, we have no responsibility in that matter. We sold it with a bill of lading to Aruba. We have lost title in Aruba."

In separate remarks, Trinidad's prime minister Keith Rowley also denied any sales to Venezuela.

With the exception of two Russian trading companies, US oil sanctions on Venezuela do not have any direct secondary component. But non-US companies are discouraged from trading with PdV, partly on the basis of US financial sanctions on Venezuela that date back to 2017.

Paria chairman Newman George said the firm conducted due diligence on the transaction before concluding it. ES Euro Shipping started negotiations with Paria on 28 March to purchase fuel, George said. A shipment of 150,000 bl of excess stock was subsequently shipped to Aruba on 21 April, he said.

Trinidad's political opposition has dubbed the sale as "fuelgate" and warned of US scrutiny. Any rift with the US "could gravely damage our very beneficial trade, national security and foreign relations," opposition leader Kamla Persad Bissessar said.

Paria Fuel Trading was created when the government closed the 160,000 b/d Petrotrin refinery in November 2018. The company has been importing around 25,000 b/d of products to meet domestic demand.

In line with Caribbean trade group Caricom, Trinidad espouses non-interference in Venezuela's protracted conflict, and has pushed back against the US regime change policy.

Trinidad and Venezuela maintain close ties, even though efforts to jointly develop cross-border natural gas deposits have been postponed.

In an earlier controversy, Rowley met Venezuela's executive vice president Delcy Rodriguez in Port of Spain in March to discuss "a strategy to jointly combat Covid-19," according to the prime minister's account.

Rodriguez is among the top Venezuelan officials that is subject to targeted individual sanctions.

By Canute James and Patricia Garip

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