China boosts Venezuela's oil exports amid sanctions

Venezuela's oil exports remained almost unchanged last month as increased shipments to customers in China offset a decline in US-authorised sales, according to vessel-tracking data and internal documents from state company PDVSA.

The US Treasury and State departments in March revoked the authorizations they had granted in recent years for PDVSA's customers and partners to export oil from sanctioned Venezuela. They gave the firms until May 27 to wind down transactions.

The license expirations and PDVSA cancelling some cargoes to one of its main partners, Chevron, due to payment uncertainties, reduced deliveries to the state company's traditional customers in the US and Europe. However, intermediaries received more cargoes bound for China.

US President Donald Trump's administration has increased pressure on Venezuela amid complaints about what US officials have called the OPEC country's lack of progress towards electoral reforms and migrant returns.

Illegitimate President Nicolas Maduro's government rejects the sanctions and has said they amount to an "economic war" against Venezuela. The US energy sanctions have been in place since 2019 and companies abiding by them need US authorisation to export Venezuela's oil or do business with PDVSA.

In May, a total of 30 vessels departed from Venezuelan waters carrying an average 779,000 barrels per day of crude and refined products, and 291,000 tonnes of oil byproducts and petrochemicals, according to the data and documents.

In April, the South American country had exported 783,000 bpd of crude and fuel as sales to US-authorized customers began to fall, down from 850,000-900,000 bpd in previous months. In May 2024, oil exports averaged 770,000 bpd, according to the data.

China was the largest receiver of Venezuela's oil last month with some 584,000 bpd, above the 521,000 bpd of April. The US received some 140,000 bpd, slightly more than the 130,000 bpd of the previous month.

PDVSA did not deliver any cargoes to Chevron or India's Reliance Industries in May, but a large oil swap with joint-venture partner Maurel Prom and trading house Vitol was completed as planned, marking the last US-authorized deal before the license expirations.

The Venezuelan state firm began exporting Boscan heavy crude on its own to Asia, the documents showed. The grade jointly produced with Chevron was feeding US refiners before the license expirations.

PDVSA and Reliance did not immediately reply to requests for comment. Vitol and MP declined to comment.

Chevron last week confirmed its license for Venezuela had expired and said its presence in the country remained, "in compliance with all applicable laws and regulations," including the US sanctions framework.

Venezuela increased fuel imports to some 159,000 bpd in May from 94,000 bpd in April, the data showed, a move to replenish stocks of the heavy naphtha PDVSA needs to dilute its extra heavy output ahead of the reinforcement of US sanctions.

(Reporting by Reuters staff; Editing by Nia Williams)