Oil exports from Venezuela declined sharply after the imposing of US sanctions against the state owned oil producing company Petroleo de Venezuela SA (PDVSA). The impact of sanctions on the global oil market may be stronger than many experts expected, The Wall Street Journal writes.
President Nicolas Maduro cannot manage to find buyers for oil, and Venezuelan oil storages are uploading step-by-step. In addition, several dozen uploaded oil tankers are standing in waters near Maracaibo, the oil capital of Venezuela, as satellite imagery show.
According to sources, authorities have postponed sending at least one tanker to the United States last week for fear that the payment for this cargo will be on the accounts controlled by the self-proclaimed Venezuelan President Juan Guido.
Oil production in the country declines due to problems with employees who massively resign because of salary delays and hyperinflation, the lack of imported petroleum products with which Venezuela weaken its oil, WSJ sources say.
Some sources close to PDVSA note that production in Venezuela was declined by less than 1 million barrels per day. If this data is correct, the production in the country has fallen by 10% since December and more than doubled over the past year and a half. Meantime, Wood Mackenzie analysts estimate oil production in Venezuela at 1.1 million b/d in January.
US sanctions against the PDVSA company provide for the freezing of the company's assets worth $7 billion. Furthermore, it is expected that PDVSA will receive less than $11 billion per year as a result of oil exports lost.
Later, the US Department of Treasury got it straight that the sanctions would be lifted in when there will be the democratic change of leadership will in Venezuela to the transfer of control to “interim president Juan Guido or another democratically elected government”.
On Friday, the Foreign Assets Control Office (OFAC) issued an adjustment of the Venezuelan sanctions, which contemplates that citizens and US companies have the right to buy oil and oil products from PDVSA or legal entities by 50% or more controlled by PDVSA until April 28. However, the funds for the supply will be allocated to the escrow in the United States, which will be beyond the control of the current authorities.
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