The US government is apparently considering allowing US Oil companies to resume limited operations in Venezuela. This was reported by five sources familiar with the matter, Commerzbank’s commodity analyst Carsten Fritsch notes.
US Oil inventories are currently well below the five-year average
“As under former US President Biden, licenses are to be issued for this purpose. US President Trump had stopped this practice at the beginning of his second term. As a result, US imports of crude Oil and Oil products from Venezuela fell to 175,000 barrels per day in April, after standing at around 300,000 barrels per day at the turn of the year.”
“Before sanctions were imposed on the Maduro regime during Trump’s first term in 2019, US Oil imports from Venezuela amounted to more than 600,000 barrels per day. Trump’s apparent U-turn could be due to the tight supply situation in the US. US crude Oil inventories are currently well below the five-year average.”
“In addition, there is a shortage of heavy crude Oil with high sulfur content, which US refineries need as an additive to light, low-sulfur US shale Oil for processing. Oil from Venezuela meets this requirement. Oil exports from Venezuela are to be handled through swaps to prevent the export revenues from ending up in Venezuela’s coffers. It remains to be seen whether Venezuela will agree to this.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
