US sanctions on PDVSA not putting a stop to Caribbean-upcoast runs
Barbara Trone, Marieke Alsguth, Catherine Wood / Platts
Petroleumworld 01 31 2019
Dirty tankers carrying Venezuelan crude and refined products to the US are so far unaffected by the US sanctions on state-owned oil company PDVSA as long as tanker charterers, including US refiners and traders, deposit payments for the shipments into blocked accounts located in the US.
According to shipowners, there will be no material change for cargoes on the water until the US declares there will be zero imports from Venezuela.
"Owners may continue to err on the side of caution, however, in doing business there, but for now we see it as business as usual, as long as the charterers use those frozen accounts," a shipowner said.
If owners choose to conduct business in Venezuela, the reliance on charterers following sanction rules could further complicate charter party agreements, with shipping sources still unsure of the specific impacts to operations.
In addition to concerns over operational implications, the Americas dirty tanker market is still uncertain about potential shifts in crude flows following the introduction of the sanctions, however one owner said the sanctions could make crude exports out of Venezuela favorable for Asian buyers in China or Russia for instance.
CLEAN TANKER OWNERS ASK PREMIUM FOR VENEZUELA LOADERS
Clean tankers carrying gasoline blendstocks from Venezuela to upcoast destinations in the US are so far also unaffected in principle.
However, clean tanker sources expect freight costs for vessels loading in Venezuela will increase, and that freight on the Venezuela-US Atlantic Coast route will hold a premium to freight for a vessel loading in the Caribbean outside of Venezuela.
"Charterers and non-US entities can move in and out as long as documentation is in order. Owners will ask for a premium, because they're afraid of getting stuck there for a prolonged term," a shipowner said. "Why bother with other trade lanes?"
Vessel availability, which played a large role on Caribbean-upcoast routes before the imposition of the sanctions, will drive freight costs on the Venezuelan-loading routes, as sources expect many owners will refuse to call at Venezuelan ports.
Market indications for a Venezuelan premium on the Caribbean-USAC route have varied, as the route has been relatively untested since the announcement of the sanctions.
"I heard an owner offering around Worldscale 250 for a Venezuela-US Atlantic coast run," the first shipowner said. The same shipowner indicated freight on the Caribbean-USAC route for a non-Venezuelan load was in a range of w130-w135. A second shipbroker and a charterer indicated freight for a Venezuela-USAC run was w160 Tuesday, while calling around w125 for a non-Venezuela load.
DIRTY TANKERS SAILING FROM VENEZUELAN TERMINALS
In the dirty tankers sector, data from S&P Global Platts' cFlow trade flow software show four Aframaxes and one Suezmax left Venezuelan crude terminals for ports on the US Gulf Coast Tuesday, one day after the Trump administration unveiled the sanctions.
The Eagle Sapporo and Searover Aframaxes left Jose Terminal and are destined for Corpus Christi, Texas, and Lake Charles, Louisiana, where PDVSA US refining subsidiary Citgo's 157,500 b/d and 418,000 b/d refineries are located. The Aframaxes Hydra and NS Concept left Punto Fijo for Pascagoula, Mississippi and Houston, respectively.
The Suezmax Sonangol Cazenga sailed from Jose Terminal with a destination of Pascagoula, according to cFlow.
DILUENT TRADE STOPPED EN ROUTE
Yet clean tankers on the USGC-Venezuela run were impacted as several cargoes of US diluent bound for Venezuela were abruptly halted Tuesday, following the imposition of the sanctions on.
According to a clean tanker owner, up to five such Medium Range vessels were stopped en route to Venezuela.
"Sanctions should only affect the [clean petroleum products] imports, only the diluent naphtha," the shipowner said.
According to S&P Global Platts data, Citgo has placed the Horizon Aphrodite on subjects to load 38,000 mt of refined products for a US Gulf Coast-Venezuela voyage.
Data from cFlow shows the vessel departed Lake Charles Tuesday, and is currently en route to Jose Terminal, but at an unusually slow speed of 1.5 knots. The average steaming speed for a Medium Range tanker is 12-13 knots.
The data also shows the Medium Range tankers BW Thames and Seletar Spirit leaving Houston and Lake Charles Tuesday for Jose Terminal.
Platts fixture logs show the Elka Glory and the Maersk Tacoma on subjects for Citgo on USGC-Venezuela and USGC-Caribbean voyages loading Tuesday and Friday, respectively. The Elka Glory was stationary at the entrance of the Galveston/Texas City ship channel, while the Maersk Tacoma was moored at Corpus Christi on Wednesday
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Edited by Barbara Trone, Marieke Alsguth, Catherine Wood ; Edited by Keiron Greenhalgh from Platts / SPGlobal.
spglobal.com 01 30 2019
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