Venezuela Gets Fuel From Russia - Venezuela Update - Eaglesinvestors

“Venezuela gets fuel from Russia” that is great! However, this is a double-edged sword because the bills are escalating like crazy! In today’s Venezuela update we will look into Russia’s involvement in the Venezuela crisis and the consequences of Venezuela getting fuel from Russia.

Venezuela gets fuel from Russia. Why? What is their relationship?

First and foremost, as far as allies go, Venezuela is a rather cheap one for Russia. However, the potential yields on Moscow’s investment in Venezuela could be incomparable.

In exchange for meek loans and bailouts throughout the past decade, Russia now holds substantial parts of a minimum of five oil fields in Venezuela; which has the largest reserves worldwide; Along with 30 years’ worth of impending yield from two Caribbean natural-gas fields.

Just to mention a few!

Venezuela gets fuel from Russia but can they manage the bills?

Venezuela is paying hefty premiums to import fuel from Russia and Europe, with less than a dozen sellers identifying the risk as worth the reward; after the flows from the U.S dried up due to sanctions; according to trading sources and what data showed.

Why Venezuela gets fuel from Russia and Europe?- well, the South American nation exports crude, however, its refineries are not in excellent condition; therefore they need to import diesel and gasoline for power plants and petrol stations as well as naphtha for dilution of its heavy oil.

From the time when the United States imposed new sanctions on Venezuela as of Jan. 28, product supplies have mostly come from; Russian oil major Rosneft, India’s Reliance Industries, Spain’s Repsol and trading houses Vitol and Trafigura, according to vessel-tracking data and other sources.

Ship owners impose up to 50 cents for each barrel

Furthermore, despite the provision of fuel, Russia has remained a traditional political supporter of Caracas, capital of Venezuela; although India and Spain have established trade ties as well. However, even the supplies from those allies are coming at a price.

An executive from PDVSA a Venezuelan state-run oil firm who is accustomed to recent purchases said; “The prices that they charge us are horrifying,”

The executive then noted that the heavy premiums were partly because each cargo passed through numerous hands before it reaches Venezuelan ports; also involving complex and costly ship-to-ship transfers.
A trader was involved in one fixture said that ship owners were now imposing charges of up to 50 cents for each barrel to Venezuela as opposed to 15-20 cents before sanctions.

Last year

Venezuela imported most of its products from the US; with the key providers being PDVSA’s U.S. subsidiary Citgo Petroleum as well as a U.S. unit of India’s Reliance.

The monthly supplies varied, nevertheless, in December alone, PDVSA managed to import almost 300,000 barrels of fuel per day as its domestic refineries operated at just below a third of its 1.3-million-bpd (barrels per day) capacity, according to PDVSA data.

Imports have dropped to 140,000 bpd of diesel, naphtha, gasoline and other fuels as of the end of January, Refinitiv Eikon data indicates.

Additionally, at least 13 cargoes holding 5 million barrels of different fuels are headed to PDVSA’s terminals or on standby waiting in Venezuelan waters to discharge; this is according to shipping sources as well as Eikon data.

In conclusion – Venezuela gets fuel from Russia and avoids a complete fuel crisis

As Some Venezuelan petrol stations continue to receive insufficient fuel from PDVSA in the recent weeks; scarcity of supply has gotten worse in regions that include; the south of the country as well as the Andean states. With that in mind; Even though the bills may be soaring, thanks to Russia, Venezuela has so far avoided a full-blown fuel crisis.

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