Venezuela has received this year's first cargo of the Iranian condensate that has proven critical to its crude production recovery.
Data from analytics firm Vortexa show the very large crude carrier (VLCC) Starla, owned by Iranian state-controlled NITC, discharged roughly 2mn bl of condensate at Venezuela's Jose terminal on 28-29 January. This follows at least three 1.85mn-2mn bl shipments in 2021, largely in September and mid-November, according to Vortexa.
The cargoes are part of a swap deal: Iranian condensate for Venezuelan heavy crude. State-owned PdV uses the condensate to dilute and upgrade extra-heavy crude from the Orinoco belt into exportable volumes and this, along with using part of local refinery yields to do the same, enabled Caracas to sharply bolster crude production in the fourth quarter of last year. Output jumped by 230,000 b/d — or 44pc — from 520,000 b/d in September to a 22-month high of 750,000 b/d in December, according to an Argus survey.
The swap agreement benefits Iran's attempts to offload a glut of condensate it has accrued in NITC-hosted floating storage.
Venezuela and Iran have seen their crude output choked by US commercial sanctions, and send what they can to China on tankers that turn off transponders.
The prospects of an increase in Iranian production depends on the ongoing diplomatic negotiations in Vienna that could ease US sanctions. A senior US official says talks have progressed into the "final stretch," although there is no guarantee of success](https://direct.argusmedia.com/newsandanalysis/article/2297295).
