Venezuela's Oil Exports Stall in October Amid High Freight Rates

Venezuela's oil exports barely budged in October, averaging 1.08 million barrels per day, the lowest level since February, according to shipping data cited by Reuters. Stagnant crude production and high freight rates continued to curb demand for several South American grades. Exports to the United States, the top destination for Venezuelan crude, fell nearly 29% from the previous month to about 449,000 barrels per day.

Another version of the same trend, based on Bloomberg shipping reports and U.S. customs data, pointed to a 25% drop in shipments compared with September, with tankers loading an average of 809,000 barrels per day during October. That measure attributed the decline to rising freight costs and seasonal refinery maintenance, as well as PDVSA's refusal to lower its prices to offset higher shipping costs, which reduced the competitiveness of Venezuelan crude against other producers such as Canada.

The rise in shipping costs was linked to disruptions in global trade flows caused by the conflicts in the Middle East and Russia, which forced tankers onto longer routes and reduced vessel availability due to sanctions. According to Argus Media data, the cost of shipping Venezuelan crude on Aframax tankers to its main buyers in Texas, Louisiana and Mississippi reached US$13.85 per barrel in early October, its highest level in several years, before easing to US$9.41 per barrel, though it continued to weigh on export competitiveness.

While shipments to the United States fell, exports to Europe rose to 235,000 barrels per day from 86,000 in September, while shipments to India edged down slightly to 242,000 barrels per day from 253,000, and volumes bound for Caribbean storage hubs climbed to 83,000 barrels per day from 76,000. Chevron increased its Venezuelan crude exports to about 303,000 barrels per day, its second-highest monthly average this year, while volumes handled by traders such as Vitol and Trafigura fell to around 506,000 barrels per day from 637,000 in September. In total, 67 vessels departed Venezuelan waters in October carrying crude, fuel, derivatives and petrochemicals, with volumes down 0.5% from September but up 21% from the same month a year earlier.

Compounding the logistical challenges was weaker international demand stemming from autumn maintenance at refineries in the United States, Europe and Asia. In the U.S. case, demand for Venezuelan crude fell 27% from the previous month, while China completed ten consecutive months without purchasing oil from Venezuela.