U.S. Gives Chevron Green Light To Return To Venezuela

The US government has granted Chevron a sanction exemption for its operations in Venezuela, but only on the condition that no money from these operations would go to the Venezuelan government, according to Reuters, citing unnamed sources.

A week ago, Reuters reported that the US government was considering reversing its earlier decision to force Chevron out of Venezuela amid a new sanction push against the Maduro government. Chevron was cautious in its reaction to the report.

“Chevron conducts its business globally in compliance with laws and regulations applicable to its business, as well as the sanctions frameworks provided for by the US government, including in Venezuela,” the company said last week in reaction to the news it could be allowed to return to Venezuela, where it produced some 240,000 barrels of oil daily.

Amid these reports, ING predicted that Venezuelan crude oil supply would gradually return over the second half of the year. TradeWinds forecast a rebound in demand for Aframax and Suezmax tankers following the decision.

Kpler noted in a commentary that the exemption granted to Chevron would result in a price correction for heavy crude grades. The data analytics provider said the exemption was “expected to help cool the heat in the heavy crude market — albeit arriving somewhat late, as the peak summer demand season is nearing its end.”

Kpler senior crude oil analyst Muyu Xu added, “Nevertheless, it introduces upside risk to global supply just as the market is on the brink of shifting into oversupply by late Q3.” The US was importing Venezuelan crude at a peak rate of around 300,000 barrels daily last year and early this year, according to Kpler.

Source: https://energynewsafrica.com