Chart of the week : U.S. weekly crude imports from Venezuela
Head of Macroeconomic Research
Summary: In today’s ‘Macro Chartmania’, we focus on U.S. weekly crude import from Venezuela. It has been flat since April 2019. But things might change following a meeting this weekend between U.S. officials and the Venezuelan government to talk about oil exports to replace Russia's.
Access this week's full edition of Macro Chartmania composed of more than 100 charts to track the latest macroeconomic and market developments. All the data are collected from Macrobond and updated each week.
The below chart shows the evolution of U.S. weekly crude imports from Venezuela. The country used to produce roughly 5m bbl/day and to export at least 1m bbl to the United States in better times. Exports to the United States dropped to zero on 28 April 2019 when the Trump administration banned U.S. companies from importing Venezuelan oil. Before the sanctions were introduced, exports were already in a free fall (minus 80 % from April 2018 to April 2019). The shortage of US dollars, the long-term underinvestment in oil infrastructures and reputation risk for U.S. companies doing business in Venezuela explain the drop in 2018. Without U.S. buyers, Venezuela had to turn to Asia (mostly China and India) and to Iran. The initial arrangements of the Iran-Venezuela cooperation deal entitled that Iran purchases Venezuelan oil while Venezuela buys Iran’s petroproducts to reinvigorate its energy industries.
In a surprising turn of events, last week, U.S. envoys went to Venezuela’s capital, Caracas, to restore diplomatic ties and to negotiate a lift of U.S. sanctions on the condition that Venezuela does not back up Russia anymore (see the report from the Wall Street Journal). It is still early days. But there is a clear path for at least a partial lift of the U.S. sanctions, in our view. The United States is set to ban Russian oil as soon as today. The European Union could announce steps to reduce drastically dependence on Russian oil as early as this week, perhaps at the upcoming EU Summit in Versailles (France) scheduled for 10 and 11 March. In these circumstances, Venezuela’s oil could serve as a substitute (Russia’s oil exports to the United States topped to 500.000 bbl/day). Venezuela is an obvious option for the United States for two reasons. First, it is highly more convenient to get those barrels online from Venezuela, which is closer, than from Russia. Second, Venezuela’s super-heavy oil is a great match for light U.S. shale to balance it out. It won’t be all easy, however. There are pending questions regarding the real state of Venezuela’s oil infrastructures and its capacity to speed up production in a short period of time.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.