US getting 30% higher price for Venezuelan oil than Venezuela did weeks ago, energy chief says

[WASHINGTON] US Energy Secretary Chris Wright said on Thursday the US is getting a 30 per cent higher price for Venezuelan crude oil than Venezuela got before US special forces captured President Nicolas Maduro this month.

“We’re getting about a 30 per cent higher realised price when we sell the same barrel of oil than they sold the same barrel of oil three weeks ago,” Wright said at a US Energy Association event. Wright did not detail the prices of the oil sales before and after the capture of Maduro.

The US has completed the first sales of Venezuelan oil that are part of a US$2 billion deal reached this month between Caracas and Washington, a US official told Reuters on Wednesday. The first sales were valued at US$500 million, with additional sales expected in the coming days and weeks, the official said.

President Donald Trump’s administration has said it will sell up to 50 million barrels of the country’s stranded oil and will keep selling produced Venezuelan oil indefinitely.

In December, oil buyers in Asia demanded deep discounts on Venezuelan crude due to a flood of sanctioned oil from Russia and Iran on offer and to the heightened risk of loading in the South American country, traders said.

Due to quality issues with the oil and US sanctions, state oil company PDVSA had been forced to slash prices, with the discount to Brent benchmark crude about double year-ago levels.

With Russian and Iranian supplies also sold at deep discounts, buyers in China were barely biting at offers of Venezuela’s flagship Merey heavy crude at US$14 per barrel below Brent, a trader involved in sales to Chinese independent refiners said in December.

This week, Venezuelan heavy crude Merey-16 oil was offered for US Gulf Coast delivery at a discount of around US$6 to Brent crude futures, a trader said on Wednesday, while Western Canadian Select at Houston settled at a roughly US$12.50 discount to Brent on Tuesday. REUTERS