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

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

Macro
Christopher Dembik

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

01 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Capital Markets UK Ltd. (Saxo) and the Saxo Bank Group provides execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation. Access and use of this website is subject to: (i) the Terms of Use; (ii) the full Disclaimer; (iii) the Risk Warning; and (iv) any other notice or terms applying to Saxo’s news and research.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer for more details.

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992