Chart Chart Chart

Chart of the week : U.S. weekly crude imports from Venezuela

Macro
CD
Christopher Dembik

Head of Macro Analysis

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.

Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.