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

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

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

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.