As Crude Stocks Deplete, Tanker Congestion Emerges in Venezuela

6 mins read  Sealuminati TeamMay 21, 2021

According to reports, more than a dozen big tankers waited on May 19 at Venezuela's main oil port and surrounding anchorage zones for state-run PDVSA to give them slots to load crude, as outages and low inventories triggered delays.

Venezuela's crude production fell to 445,000 barrels per day (B/D) in April, dropping by 81,000 B/D from March levels, reported independent sources consulted by OPEC.

The decline was primarily caused by a scarcity of diluents needed to generate exportable grades from the country's largest oil field, the Orinoco belt.

Although production decreased, oil exports remained steady at around 700,000 B/D from February to April as Venezuela used more and more of the crude stored at the Jose port, which has been the country's best asset to sustain sales.

However, shipments have depleted inventories that have not yet been replenished by new supplies, according to PDVSA internal records. As a result, there is a backlog of tankers waiting to load.

According to multiple maritime reports, the vessel backlog is visible around Jose and even around La Borracha island, a location for ship-to-ship transfers off Venezuela's eastern coast.

Backlogs include 19.6 million barrels of oil, which, according to loading schedules, may amount to about 650,000 B/D if shipped in a month.

It has been reported that there is a growing crowd of tankers waiting near La Borracha. In fact, some of them are there for more than a month. No immediate response was received by either PDVSA or the Oil Ministry of Venezuela.

This week the Petropiar crude upgrader and the Sinovensa blending plant near Jose stopped operating due to a gas supply disruption in a refining plant following a crash. These facilities are important for refining extra-heavy raw materials from the Orinoco into exportable grades, thereby halting the crude oil shortages.

According to the papers, two very large crude carriers (VLCCs) currently docked at Jose have disrupted the loading phase several times this week due to a shortage of supplies and quality issues.

These disruptions also set backloading windows previously allocated to other tankers that were scheduled to follow for crude exports this month, primarily to Asia.

According to PDVSA documents from Reuters, the Merey 16 flagship-grade oil inventories of Venezuela fell down from two million barrels on 26 April to 1.6 million barrels as of 18 May, and at the end of March almost four million barrels.