Vitol and Trafigura, major players in global oil trading, are seeking larger discounts on Venezuelan crude due to rising freight costs that are impacting their profit margins. Since the U.S. intensified efforts to revive Venezuela’s oil sector after capturing former President Nicolas Maduro, these firms have significantly increased their control over the country’s oil exports, now handling over half of them. However, the volatile energy market poses ongoing challenges.
Despite a recovery in prices for Venezuela’s Merey heavy crude, which rose to $76.82 a barrel in August, the state oil company PDVSA is facing pressure. Recent agreements have seen PDVSA selling crude at $12 to $13 below Brent, while intermediaries are reselling it at an even steeper discount. Vitol and Trafigura are currently bidding $18 to $20 below Brent for U.S. and European cargoes, citing the need to offset soaring freight costs.
Freight rates have surged dramatically, with chartering an Aframax tanker from Venezuela to the U.S. Gulf Coast now costing about $3.5 million, a significant increase from earlier this year. As a result, while oil exports remained steady at 1.17 million barrels per day in August, logistical challenges persist, complicating efforts to enhance Venezuela’s oil output.
