HOUSTON (Reuters) – Venezuela’s crude sales to the United States, an ideological foe that remains one of its most important oil customers, were up 21 percent in January compared to December but sharply below year-earlier levels, according to Thomson Reuters Trade Flows data.
The South American OPEC nation’s production decline has contributed to a severe economic recession and political turmoil. The United States remains a critical market because most U.S. buyers pay cash for the oil amid financial sanctions imposed in August on Venezuela by President Donald Trump’s administration.
U.S. Secretary of State Rex Tillerson this week raised the prospect of broader sanctions, including halting U.S. imports of Venezuelan crude and barring the sale of U.S. refined products to the nation. However, Tillerson said he was concerned about the impact such measures would have on citizens already suffering from severe shortages of food and medicine.
Venezuela’s oil output fell last year to its lowest level in almost three decades, hitting exports of crude and refined products, especially to the United States.
The country’s oil exports to the United States were 476,550 barrels per day (bpd) last month, 29 percent lower than in January 2017, according to the data. But state-run PDVSA’s oil exports recovered slightly versus the previous month due to larger sales of upgraded crude from Venezuela’s Orinoco Belt.
In December, Venezuela’s crude exports to the United States fell to 392,710 bpd, knocking 2017’s average to its lowest level since 1991.
The United States last month imported a total of 29 cargoes of Venezuelan crude versus 24 in December. The largest receiver was independent refiner Valero Energy Corp, followed by PDVSA’s unit Citgo Petroleum and Chevron Corp.
Phillips 66 and PBF Energy Inc , historically two large U.S. purchasers of Venezuelan oil, did not buy crude from PDVSA or its joint ventures last month, according to the data.
Venezuela’s acute oil production fall, which prompted many analysts to adjust forecasts for this year, has stirred fears of an economic collapse of the nation of 30 million people.
Venezuela is already suffering from hyperinflation, lack of hard currency and recession.
The oil-dependent nation’s output decline last year was the biggest among members of the Organization of the Petroleum Exporting Countries, which has pledged to restrain production through 2018.