Since the IMF and US administration in Washington targeted Venezuela with hostile warlike sanctions, the oil-rich country has turned into distress. Special USA Envoy Elliott Abrams threatened to “go after” shipping companies that continue to transport Venezuelan crude.
For his part, Abrams, who is known in Washington as a neoconservative hardliner and key policy architect behind the US wars in Iraq and Central America, vowed to continue targeting Venezuela’s beleaguered export market.
Abrams can use all means to destroy the government and its people in Caracas for not listening to the US politicians. Even killing captains on Venezuelan oil tankers came into the equation?
US Special Envoy for Venezuela Elliott Abrams confirmed that the policy is having its desired effects. “What you will see is most shipowners and insurance [companies] are simply going to turn away from Venezuela.
The US Treasury, managed by BlackRock is also pushing classifiers to withdraw certification from vessels that violate US sanctions, causing them to be in breach of contract and lose insurance coverage for the ship and cargo.
As a direct result, Venezuela’s crude production has declined steeply from averages of 1.911 million bpd in 2017 and 1.354 million bpd in 2018, following the imposition of US financial sanctions against PdVSA in August 2017.
Last year, the country was further hit with an embargo and a blanket ban on all dealings with Venezuelan state entities. After falling for much of the year, production stabilized in the last quarter to bring the 2019 average to 796,000 bpd.
The Russian energy giant was forced to shutter its Venezuela operations and transfer its assets to a Kremlin-owned holding company. Rosneft had been carrying as much as 60% of Venezuela’s output before rerouting it to other destinations.
Secondary sanctions, coupled with low oil prices and contracted global demand due to the Corona-virus pandemic, have forced PdVSA to halt production in several projects and joint ventures as the company runs out of storage space for unsold crude.
The struggling state firm may get some short term respite following reports that India’s Reliance Industries will load its first cargo in months in an oil-for-diesel swap deal. Both Reliance and the shipping company NGM Energy have stressed that the transaction was run by US authorities.
A shipping industry source quoted by Reuters said that US measures against Venezuela have caused significant uncertainty in commercial shipping.
Venezuela Analysis / ABC Flash Point OPEC News 2020.