Venezuela oil flow sags, Iran offers more help
Venezuela's crude production entered November on a downswing after the US banned non-US companies from crude-for-diesel swaps at the end of October.
Output was slipping below an October average of 350,000 b/d as Spain's Repsol, Italy's Eni and India's Reliance stopped crude liftings and low-sulfur diesel supply that had previously been permitted under the US sanctions, Venezuelan oil industry sources told Argus.
The diesel cut-off has left Venezuela's state-owned PdV with few export options and nearly replete storage, a pattern repeated over the course of the nearly two years since the US imposed the oil sanctions in January 2019. Crude exports in October plunged to roughly 350,000 b/d, half of the September level.
Among PdV's joint ventures that are still partially operating is PetroPiar, a heavy crude upgrading project in which Chevron holds a 30pc stake. The 170,000 b/d upgrader, based in the eastern industrial complex of Jose, is producing around 65,000-70,000 b/d of synthetic crude.
Chevron and a handful of US-based oil services companies remain in Venezuela under a restricted sanctions waiver that the US government is expected to renew again when it expires on 1 December, regardless of the outcome of the tense US presidential race currently in play.
Into the woods
The Venezuelan government of President Nicolas Maduro routinely blames the sanctions for the national oil industry's decline, most acutely reflected in a gasoline shortage. PdV's efforts to repair its 305,000 b/d Cardon refinery, one part of its mostly broken 1.3mn b/d refining system, have largely stalled.
Another gasoline supply respite could be on the horizon, after Iran's foreign minister Javad Zarif met with his Venezuelan counterpart Jorge Arreaza and Maduro yesterday in Caracas. Iran shipped gasoline to Venezuela in May-June and again in September-October, briefly alleviating a severe deficit that has fortified a black market controlled by Maduro loyalists, a trend that could now extend to increasingly scarce diesel as well.
The US recently impounded Iranian oil cargoes aboard Liberia-flagged, Greek-owned tankers that it claimed were en route to Venezuela, but it did not stop the gasoline and alkylate shipments that came directly from Iranian state-owned NIOC aboard Iran-flagged vessels.
For most Venezuelans, the most pressing fuel shortage is for LPG, which is traditionally used for cooking. The supply gap has widened because of PdV's impaired natural gas production and fractionation infrastructure in eastern Venezuela. Electric hotplates to which many residents have resorted often short-circuit because of choppy electricity service, a problem that the diesel cut-off and associated blowback on Repsol and Eni's offshore gas production are likely to aggravate. The combination of fuel shortages has created an unprecedented market for firewood, which is selling for as much as $4/cord.
Related news posts
Hurricane Helene shuts in 29pc of US Gulf oil
Hurricane Helene shuts in 29pc of US Gulf oil
New York, 25 September (Argus) — Hurricane Helene, which is forecast to intensify as it heads for a late Thursday landfall in Florida, has shut in about 29pc of US Gulf of Mexico oil output. Around 511,000 b/d of US offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 313mn cf/d of natural gas production, or 17pc of the region's output, was also off line. Operators have so far evacuated workers from 17 offshore platforms. Helene was last about 110 miles north-northeast of Cozumel, Mexico, according to a 2pm ET advisory from the US National Hurricane Center, with maximum sustained winds of 80 mph. Helene is expected to be a major hurricane, with winds of at least 111mph, when it reaches the eastern Florida coast on Thursday evening. "A turn toward the north and north-northeast with an increase in forward speed is expected later today through Thursday, bringing the center of Helene across the eastern Gulf of Mexico and to the Florida Big Bend coast by Thursday evening," the center said. Shell restarting some production Although the hurricane will largely pass to the east of most offshore oil and gas production areas, companies have taken precautionary measures. Given a shift in the forecast track, Shell said late Tuesday that it had started to ramp up production at the Appomattox platform to normal levels, and was in the process of restoring output at the Stones facility, both off the coast of Louisiana. It paused some drilling operations. Chevron said earlier it was shutting in production at company-operated facilities in the Gulf of Mexico, and evacuating all workers. Equinor said it was shutting down the Titan oil platform. BP had earlier this week started to shut in production at its Na Kika and Thunder Horse platforms, southeast of New Orleans, and was curtailing output from its Argos and Atlantis facilities, as well as removing non-essential staff. US offshore production was disrupted earlier this month when Hurricane Francine made landfall, with up to 42pc of production was offline at one point. The offshore Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US trucking index at 18-month high in August: ATA
US trucking index at 18-month high in August: ATA
Houston, 25 September (Argus) — US trucking freight volumes rose in August to the highest level since February 2023, the American Trucking Association (ATA) said. The ATA's seasonally adjusted Truck Tonnage Index (TTI) rose in August by 1.8pc from a month earlier and by 0.7pc from a year earlier. The index has increased on a monthly and yearly basis only twice in the past 18 months, last doing so in May 2024 . August's "robust gain" indicates freight levels are rebounding from a bottom, according to ATA economist Bob Costello. The TTI's month-to-month movement so far this year also shows the freight market is "at an inflection point," Costello said. The US trucking industry contracted in 2023 and initially got off to a slow start this year. Last week, the Federal Reserve cut its target lending rates for the first time in four years , suggesting the worst inflationary pressures may be over. The TTI is calculated monthly using a survey of ATA membership to estimate seasonally-adjusted trends in the value of US truck freight. Trucking comprises roughly three-quarters of tonnage carried by all modes of transportation in the US, and so can serve as an indicator of the health of the transportation sector and the economy at large. By Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vertex Energy files for bankruptcy, seeks sale
Vertex Energy files for bankruptcy, seeks sale
Houston, 25 September (Argus) — Specialty refiner Vertex Energy has filed for chapter 11 bankruptcy in a US court following a failed foray into renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery. Vertex has entered into a restructuring support agreement with its lenders and secured $80mn of new funding to finance its day-to-day business operations, the company said late Tuesday. The refiner is also considering a "more value-maximizing sale transaction" and expects to confirm its chapter 11 bankruptcy plan by the end of the year, according to the 24 September press release. Vertex announced in May this year that it would "pause" renewable diesel production at its Alabama refinery and return the unit to producing fossil fuel products. The company later said it would use a third quarter turnaround to return the Alabama plant's converted hydrocracking unit to processing fossil fuel feedstocks and be back online in the fourth quarter. Vertex also operates a re-refinery near New Orleans, Louisiana, that produces low-sulfur vacuum gas oil (VGO) and multiple used motor oil (UMO) processing plants and collection facilities along the Gulf coast. Refiners have faced mixed fortunes in recent years with their investments in renewable fuels after a glut of new supply flooded markets and depressed renewable credit prices. US independent refiner Delek announced in August that it is temporarily idling three biodiesel plants in Texas, Arkansas and Mississippi as it explores alternative uses for the sites. Chevron said earlier this year it was indefinitely closing two biodiesel plants in Wisconsin and Iowa due to market conditions. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Helene shuts in about 16pc of US Gulf oil: Update 2
Helene shuts in about 16pc of US Gulf oil: Update 2
Adds daily spot market crude pricing information. New York, 24 September (Argus) — Tropical storm Helene, which is expected to develop into a hurricane on Wednesday before coming ashore in Florida Thursday, has shut in about 16pc of US Gulf of Mexico oil output. Around 284,000 b/d of US offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 208mn cf/d of natural gas production, or 11pc of the region's output, was also off line. Operators have so far evacuated workers from four offshore production platforms. Helene was last about 175 miles east-southeast of Cozumel, Mexico, according to a 2pm ET advisory from the US National Hurricane Center, with maximum sustained winds of 45 mph. The current forecast has the center of Helene entering the eastern Gulf of Mexico Wednesday morning and moving north-northeast toward a possible landfall near the Florida panhandle region late Thursday. By then it will have strengthened into a major hurricane, with winds of at least 111mph, according to forecasts. While the storm will largely pass to the east of most offshore oil and gas production areas, companies started suspended some operations on Sunday. Chevron began evacuating workers and shutting in its Blind Faith and Petronius platforms. "While we are also transporting nonessential personnel from our four other Chevron-operated Gulf of Mexico platforms, production there remains at normal levels," the company said. Shell said Monday it had shut in output from its Stones facility and curtailed production from the Appomattox platform, both off the coast of Louisiana. The company was also relocating non-essential workers from its assets in the Mars corridor, and suspending some drilling operations. Equinor said it was shutting down the Titan oil platform as a precaution. BP had started to shut in production at its Na Kika and Thunder Horse platforms, southeast of New Orleans, and was curtailing output from its Argos and Atlantis facilities, as well as removing non-essential staff. Offshore spot prices rise slightly The Na Kika platform is connected by pipeline to the Shell-operated Delta pipeline system, which carries Heavy Louisiana Sweet (HLS) crude to shore. During trading on Tuesday, October HLS rose by 20¢/bl relative to the light sweet crude benchmark in Cushing, Oklahoma, to an 80¢/bl discount. The October US pipeline trade month ends Wednesday. The Thunder Horse platform production is marketed as part of a sour crude stream by the same name that is priced at the Louisiana Offshore Oil Pipeline's (LOOP) facility in Clovelly, Louisiana, where it has dedicated underground cavern storage, as does Mars. On Tuesday, Thunder Horse traded at a 50¢/bl discount to the Cushing benchmark, after wide discussion circled a 40¢/bl discount in the prior session. Medium sour secondary benchmark Mars tightened its gap to the Cushing basis by 30¢/bl to a volume-weighted average discount of roughly $1.55/bl. Crude production from the 140,000 b/d capacity Argos platform feeds into the Cameron Highway Oil Pipeline System (CHOPS), which carries Southern Green Canyon (SGC) crude to the Texas Gulf coast. Argos platform serves the Mad Dog 2 field development that came online last year. Atlantis production also feeds into SGC. No SGC transactions were reported on Tuesday. It was offered as low as $1/bl under the Cushing benchmark, lower than trade at a 50¢/bl discount in the prior session. US offshore production was disrupted earlier this month when Hurricane Francine made landfall as a category 1 storm. Up to 42pc of production was offline at one point. The offshore Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham 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