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Venezuela relies on Greek fleet to move crude

Sweeping sanctions imposed by Washington hawks restrict sales of PDVSA crude to the US, unless revenues are placed in escrow, cutting off the Maduro government from its biggest export earner. However, there are ways to legitimately circumvent these rules

US sanctions are not enough to stop oil being legally shipped out of Venezuela and Greek shipowners have been able to profit from the shifting patterns of trade taking place at the moment

GREEK tanker owners and operators are shipping Venezuelan crude to destinations beyond the reach of US sanctions as exports from the troubled South American republic fall to the lowest level in 17 years.

Eleven tankers beneficially owned by George Economou have shipped an estimated 12% of all crude that sailed from Venezuela since January 28, according to data compiled from Lloyd’s List Intelligence.

Mr Economou has been the largest provider of tonnage to charterers shipping Venezuelan crude in the two months since the US imposed sanctions on the country’s US-bound crude exports and oil earnings.

Analysis shows at least 37 different companies shipped the 60 crude cargoes tracked leaving Venezuela between January 28 to March 31.

These included tankers owned by a further 10 Greek companies, data shows. Greek-owned vessels had loaded some 28.4m barrels of the 60.4m barrels tracked over the post-sanctions period. That included three ships at anchor and used as floating storage.

The sweeping sanctions restrict sales of PDVSA crude to the US, unless revenues are placed in escrow, cutting off the Maduro government from its biggest export earner.

Oil trades with PDVSA outside the US cannot involve US currency but unlike Iran, there are no secondary sanctions. These can be imposed on those outside the US who do business with any listed entities or individuals.

There is no suggestion any shipments breached US sanctions.

TMS Tankers, the tanker arm of George Economou, did not respond to an emailed request for comment.

Plunging Venezuela exports are helping lift oil prices to fresh 2019 highs as global oil supplies tighten, alongside high compliance with agreed production cuts by OPEC producers.

Venezuelan exports in March reached 860,000 bpd, the lowest monthly pace since March 2002, according to preliminary Lloyd’s List Intelligence data.

Exports slumped to just over 1m bpd in February, and are just half the levels seen two years ago.  Widespread rolling power blackouts that shut the port of Jose in the final week of March drastically reduced exports as the backlog of tankers waiting to load grew.

Delays

These widespread delays at Venezuelan oil export ports, as well as stranded cargoes and unpaid charters or loans on vessels trading with PDVSA have intensified uncertainty within the shipping community about how best to deal with the country.

“At the very least, most transactions with Venezuela are subject to special scrutiny,” said Daniel Pilarski, New York-based partner with Waston Farley & Williams.

“Contrasting Venezuela with Iran — Iran has very specific secondary sanctions which target non-US persons dealing with Iran. Venezuela secondary sanctions are a little bit less developed but at the same time there are technically some secondary sanctions on Venezuela.

“The [US] administration has indicated to the world community that they have every intention of sanctioning non-Venezuelan persons who deal with PDVSA and Venezuela.

“Even though the rules are far less developed, I’d say there’s very much that risk. On that basis, I would say that every US person should think very, very carefully about dealing with Venezuela in any significant capacity, and any non-US persons at the very least should have a very careful weighing of risks and rewards.”

Tankers owned by the Angelicoussis Group provided four tankers to charterers including Chevron and Shell that loaded in Venezuela since January 28, Lloyd’s List Intelligence data shows.

US sanctions will be further tightened from April 28 when all US entities must wind down purchases of Venezuela crude and stop making any dollar-denominated trades for Venezuelan oil.

India and China are receiving most of the Venezuelan crude over 2019 since the US, previously its biggest buyer, stopped shipments. India is the destination for 319,000 bpd so far this year followed by China.

Despite the US sanctions, three shipments are now sailing for refineries or storage in Rotterdam and Antwerp; the Dragon, Sperchios and Erviken are scheduled to arrive before April 28.

A further six cargoes are tracked on tankers that loaded in late January or early February and have since been stranded off the US Gulf, remaining at anchor outside ports and unable to discharge since early February. There have also been loading delays of more than 10 weeks. The Bergitta arrived to load a US cargo on February 6, while other VLCCs arrived at Puerto Jose two weeks ago but have yet to sail.

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