Citgo, the US refining arm of Venezuelan state-owned PdV, told Argus it has no immediate plan to supply LPG to Venezuela under new US authorization for sale of the cooking fuel to the Opec country.
"We are aware that OFAC recently issued General License 40, authorizing certain transactions involving the exportation of LPG to Venezuela," Citgo said, referring to the US Treasury Department's Office of Foreign Assets Control (Ofac) that administers sanctions. "At this time, CITGO has no plans to engage in this activity."
Although LPG trade was never explicitly banned by the 2019 oil sanctions on Venezuela, suppliers had shied away in cautious overcompliance.
Citgo's stance is consistent with other US product traders that have said they are unlikely to resume supplying LPG to Venezuela in spite of the new clearance, reinforcing the largely symbolic nature of the US license.
Among the suppliers' concerns are PdV's credit-worthiness, market tightness and a prohibition on crude swaps that would have made LPG transactions with Caracas more commercially appealing.
But the license issued yesterday had spurred some speculation that Citgo would be an exception because it is nominally controlled by Venezuela's US-backed political opposition since 2019, when the US recognized opposition leader Juan Guaido as president of an interim government and imposed oil sanctions to force President Nicolas Maduro out of power. PdV itself remains under the control of Maduro's government in Caracas.
Allowing Venezuela to import LPG — a fuel that nearly 90pc of Venezuela's population relies on for cooking — was a humanitarian gesture, US deputy assistant secretary of state Kevin O'Reilly said today in a virtual event hosted by Washington-based think tank the Atlantic Council. "Our Treasury Department has loosened certain restrictions on cooking gas because we see that it is fundamental to the well-being of Venezuelans, their day-to-day lives, so that they can then focus on these more enduring political questions and help resolve their challenges," he said.
Faced with an acute shortage of propane canisters, many Venezuelans have been forced to use electric hot plates or firewood instead.
In 2018, the year before the US imposed the oil sanctions, Venezuela imported a monthly average of 238,000 bl (20,000t) of US propane, according to US Energy Information Administration data.
Citgo owns three refineries: the 425,000 b/d Lake Charles facility in Louisiana, the 158,000 b/d Corpus Christi, Texas, refinery and the 167,000 b/d Lemont, Illinois, refinery.
The company is a target of various lawsuits by creditors and arbitration claimants seeking to fulfill Venezuela's unpaid obligations.
