Venezuela's declining crude exports squeeze India's refiners
(Reuters) - Venezuela's crude shipments to India, its third largest export market, fell 21 percent in the first half of the year, according to internal documents from state-run PDVSA, adding to supply troubles for Indian refiners as they are increasingly pressed to diversify oil imports.
Venezuela's production decline to a 30-year low and export woes stemming from mismanagement, lack of investment and payment delays are affecting almost all of the
But the impact on India is notable and comes as its refiners are now preparing for a "drastic reduction to zero" of oil imports from U.S.-sanctioned Iran.
Last week, PDVSA officials met with executives from India's Reliance Industries and Russia's Rosneft, which owns a majority stake in India-based Nayara Energy, to discuss trade issues, the state-run company said.
The talks focused on how to remedy export delays, according to a person familiar with the matter.
Venezuela sent almost 280,000 barrels per day (
The decline is the second steepest after the United States, which has suffered a drop of about 30 percent in crude imports from Venezuela this year, the documents seen by Reuters show.
If crude supplies from Iran and Venezuela, two of India's top five oil suppliers, cannot be secured in coming months, some of the nation's refiners would have to rely almost entirely on sourcing the heavy barrels they need from Iraq, according to analysts.
"Indian refiners are very worried about supply from Iran, but also from Venezuela," said Robert Campbell from consultancy Energy Aspects.
Saudi Arabia is expected to boost supply to India in the short term, but those barrels would not match the quality of the missing Venezuelan crude, he added. "The lack of heavy barrels is not a problem only in the Atlantic Basin but in Asia as well," he added.
PDVSA and Nayara did not reply to requests for comment. India's Reliance declined to comment.
India is the world's fourth-largest refiner after the United States, China
FEWER BARRELS FOR EVERYBODY
Venezuela's crude output is declining faster than expected amid insufficient investment, attempts to seize its overseas assets over payment disputes and skilled workers leaving its oil industry due to low salaries and an extended corruption probe within PDVSA.
The country's oil production averaged 1.58 million
PDVSA last month requested customers not send tankers to its main port of Jose to alleviate congestion. But vessels have continued arriving mainly for Chinese, Indian and U.S. clients, according to Thomson
The tanker bottleneck has worsened since May, when ConocoPhillips started legal actions to seize PDVSA's assets to satisfy a $2-billion arbitration award, blocking the state-run firm from using its Caribbean terminals.
In June, PDVSA shipped to India 268,300
The unstable crude supply from Venezuela to India in recent months has mainly benefited Iraq, India's largest crude source, and
Comments