Russia has just exported a batch of high-quality Urals crude oil to Venezuela for the first time in 5 years. This move comes as Moscow faces sanctions from the US for its export activities and disruption of transportation through the Red Sea, forcing Russia to continue finding new “friendly buyers” for its main product.
The large Ligera oil tanker has now arrived near the Amuay port area of Venezuela, after loading at least 1.7 million barrels of oil using ship-to-ship transfer in the Greek coastal area in January, according to Bloomberg’s ship tracking data.
This is the first time in 5 years that Russia has exported Urals oil to Venezuela – a country that Russia considers a “friendly buyer” along with Iran and China.
There is currently no price for Russia’s Urals oil for Venezuela. Previously, this South American country has also imported Urals oil to dilute their heavy oil for export.
The rare Urals oil cargo reached the port of Venezuela amid the US stepping up enforcement of sanctions against Russia, threatening to impose sanctions on financial institutions believed to facilitate Russia’s oil exports. This threat has caused banks to become more cautious and create obstacles to payment for some Indian customers buying Russia’s Sokol oil.
Venezuela is one of the few new markets that Russia can exploit. Russia’s economic embargo and oil price shocks have made many businesses cautious about trading crude oil and fuel from Russia.
When the EU – Russia’s former largest oil market – banned the import of crude oil and fuel from Russia, Moscow turned to Asia, especially China and India, to seek new customers.
Last year, China accounted for half of the total amount of crude oil that Russia exported in 2023, with India in second place, according to Russian Deputy Prime Minister Alexander Novak.
China now accounts for 45-50% of Russia’s oil and fuel exports, while India accounts for about 40%. This is a significant increase for India – a market that before 2022 almost did not import any oil from Russia.
As for Venezuela, the country is trying to increase production to boost oil exports in the past year. This country exported an average of 700,000 barrels of oil and fuel per day in the first half of 2023. Oil Minister Pedro Tellechea said the country’s crude oil production could reach 1 million barrels per day by the end of 2023 and increase to 1.7 million barrels per day by 2024.
According to Globalpetroprices.com, Venezuela is a country with gasoline prices “cheaper than filtered water”. The average gasoline price here is $ 0.022 per liter, equivalent to about 500 VND. Meanwhile, a bottle of drinking water costs around $ 0.8.
According to reports, this is also the country with the largest oil reserves in the world, surpassing oil powerhouses in the Middle East or the US and Canada.
