The Russian energy giant had been carrying up to 60% of Venezuela’s crude output in addition to supplying diesel and gasoline.
Rosneft’s departure has severely exacerbated existing fuel shortages across the country, with most of Venezuela’s refineries crippled by a lack of imported spare parts and diluents blocked by the US embargo.
Now the Venezuelan state oil company PdVSA is slashing production as it runs out of storage space.
Inventories of Merey crude, Venezuela’s main export grade, have reached a reported 97% capacity at Jose Antonio Anzoategui terminal in eastern Venezuela.
Joint ventures such as Petrosinovensa, Petropiar and Petromonagas in the Orinoco Oil Belt, have been operating intermittently or at reduced capacity.
The country’s crude production stood at 637,000 barrels per day (bpd) in April.
Production had stabilized towards the end of 2019 after falling precipitously from averages of 1.911 million and 1.354 million bpd in 2017 and 2018, respectively, before tumbling again in recent months.
Two tankers have arrived at El Palito refinery in central Carabobo State, a third one at the Paraguana Refining Complex (CRP) in Falcón State, with a fourth one already in Venezuelan waters and a fifth one close behind.
Iran has stepped up its cooperation with Venezuela’s oil sector. Apart from the fuel shipments, the tankers have also brought chemicals and spare parts to perform repair work at the Cardon refinery which is part of the CRP.
A direct air corridor has been established, bringing more than 20 direct flights to the refinery in recent weeks, including Chinese technical teams. US entities have denounced the cooperation, threatening further sanctions in response.
The arrival of the tankers has revived a national conversation on gasoline prices, with many analysts urging the government to begin charging in US dollars.
Maduro added that he had a team of specialists evaluating new price levels, but he did not offer further details. Venezuela has the lowest gasoline prices in the world, with one liter costing fractions of a cent.
However, nationwide shortages have seen the emergence of a burgeoning black market charging drivers as much as US $3 per liter in the capital of Caracas, which has only recently been hit by the scarcities long plaguing other areas of the country.
With production crumbling under the weight of US sanctions, the Maduro government has introduced wholesale changes to the oil industry, with Economy Vice President Tareck El Aissami taking over as oil minister last month.
A leaked document likewise revealed a number of planned policy changes at PdVSA, including the gradual removal of multi-billion dollar gasoline subsidies and new incentives for foreign investment.
Venezuela Analysis / ABC Flash Point News 2020.