A resumption of Venezuela’s crude exports looked in jeopardy last night after a local court sought to disrupt elections held by the local opposition party.
The country’s electoral court said it was suspending “all effects” of the opposition primaries days after President Nicolas Maduro called the vote a fraud, reported Bloomberg.
Earlier this month, the US lifted sanctions on Venezuela’s oil exports for six months following a deal between the government and opposition parties for an internationally monitored election to be held next year.
Former lawmaker Maria Corina Machado reportedly won around 93% of the vote in the primaries on a turnout of about 2.5m people. She is barred from running for public office until 2030.
A US State Department spokesperson told Bloomberg that the US government was “closely following the implementation of the deal and will take action if Maduro and his representatives do not meet their commitments”.
US secretary of state Antony Blinken had previously stated that the suspension of sanctions would continue only if “Venezuela meets its commitments under the electoral road map as well as other commitments with respect to those who are wrongfully detained”.
The sanctions on Venezuelan state-owned oil and natural gas company PDVSA and Venezuela’s oil sector had been in place since 2019, when the Trump administration targeted the oil export revenues of PDVSA, citing the company’s significant financial support for the Maduro regime, according to broker BRS.
It also saw the US sporadically sanction tankers accused of transporting refined products to Venezuela, which effectively saw Venezuelan crude excluded from most international markets and PDVSA forced to export its crude using the so-called “dark” fleet.
For many years, India and China have been one of the largest customers of Venezuelan crude oil, according to US shipbroker Poten & Partners.
When former US president Trump tightened sanctions in 2020, India stopped importing Venezuelan crude in September of that year and China became the dominant buyer.
Since then, China has bought about two thirds of all Venezuelan exports, with the crude shipped on a combination of dedicated Chinese tankers and on vessels in the dark fleet.
In the wake of the lifting of US sanctions, brokers and analysts said it would initially have a muted impact on tanker markets due to the poor state of the Venezuelan oil industry’s infrastructure.
However, Poten reported that PDVSA had already started to approach customers with existing crude supply contracts to resume cash sales to global refiners.
