What Happened: Venezuelan state-owned energy company Petroleos de Venezuela (PDVSA) will begin blending light and extra heavy crude oil for export to India and China, Argus Media reported July 2. PDVSA will begin blending 120,000 barrels per day of extra heavy crude with 50,000 barrels per day of light crude for export from its Petropiar joint venture with Chevron.
Why It Matters: This is a temporary strategy to keep up export levels in the face of U.S. sanctions that are limiting PDVSA’s access to naphtha imports, which the company uses to dilute and export its mostly heavy crude oil. Due to limited access to light crude and other factors, such as the high rate of desertion in Venezuela's labor force and equipment failures, the company will likely continue to struggle to maintain production volumes.
Background: The United States implemented sanctions against PDVSA in January to bar the company from exports to the U.S. Gulf Coast, which has led PDVSA to focus on maintaining its exports to India and China. Washington has already begun pressuring Indian refineries to cap their imports of Venezuelan crude.