Traders, shippers, and Refinitiv Eikon data said there were more than 7 million barrels of Venezuelan oil aboard more than a dozen ships in the Gulf of Mexico on Monday, according to Reuters.
After United States President Donald Trump imposed sanctions on Caracas last week to try and slash support for President Nicolas Maduro by damaging the oil exports to the U.S.
Venezuelan exports of oil to the U.S. is one of the largest sources of foreign revenue for the Latin American country locked in a bitter political and economic crisis, since the U.S. buys more nearly 500,000 barrels of Venezuelan crude per day.
The Trump administration's latest sanctions aim to block American refiners from paying PDVSA accounts which are controlled by Maduro, which is one of the reasons why the oil tankers are waiting off the coast of Venezuela since they can not take any payments.
U.S. customers of the state-run PDVSA are now required by sanctions to put their payments into escrow accounts that have not been established yet, but those funds will be controlled by the Venezuelan Congress head and self-declared interim president Juan Guaido.
So far the European Union and a number of Latin American countries have joined Washington in recognizing Guiado as the leader of Venezuela.
Neither the U.S. Treasury Department nor White House responded to requests for comment.
Refinitiv Eikon data revealed there were more than a dozen tankers anchored in the Gulf of Mexico or off the coast of Venezuela while shippers wait for the payment system to be set up and further delivery instructions from buyers.
Traders indicated some of the oil was purchased by buyers from PDVSA before the sanctions were issued, while others were held by trading firms who were trying to find refiners to take the oil due to the payment difficulties.
“There were many cargoes of Venezuelan crude already in the Gulf when sanctions were announced,” said a trader who deals with PDVSA. Others are stuck because holders “cannot find who to sell them to due to sanctions,” the trader said.
The tankers were chartered by a number of regular U.S. purchasers of Venezuelan crude: Chevron Corp, PDVSA’s refining unit Citgo Petroleum, Valero Energy, and trading houses that sell to refiners.
“Everybody is still working through the mechanics of things, still trying to figure out how freights are going to get paid and is sitting on the sidelines waiting for this to roll out,” said one ship broker on Monday who was not authorized to speak publicly to Reuters.
There were also several tankers who were waiting for weeks to transport oil bound for U.S. customers that were left at the Venezuelan port of Jose this weekend without loading, according to Refinitiv Eikon data.
The large number of ships in the Gulf grew after there was a wait for Venezuelan ports by tankers who were waiting to receive authorization to load their cargo since PDVSA has said it will only sell to certain customers who prepay for their cargo.
Refinitiv Eikon data also revealed there were tankers carrying Venezuelan crude oil idling in the Caribbean and off the coast of Europe.
-WN.com, Maureen Foody