Venezuelan Oil Moves Into the Caribbean as US Shapes Trade

Tankers have begun discharging Venezuelan crude at Caribbean islands, publicly signaling their activity in a move that marks a new trade order after US exerted control over Caracas’ oil industry.

Two vessels delivered about 2.5 million barrels of Merey oil over the weekend to storage tanks on Saint Lucia and Curacao, staging posts for broader exports, according to ship-tracking data. In the coming days, others tankers are set to bring more Venezuelan crude to other destinations, including the Bahamas.

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The Trump administration tapped trading giants Trafigura Group and Vitol Group to help market Venezuelan barrels, and is encouraging US majors to invest in the country to revive its battered oil industry. The shipping market is being shaken up by the intervention, with freight rates surging for some routes.

Some so-called dark fleet tankers laden with Venezuelan crude have turned on their transponders as they prepare to offload their oil, while ships that have stayed clear of the trade return to participate.

The Volans — an Aframax sanctioned by the US and UK — unloaded about 600,000 barrels at Curacao on Jan. 17, according to ship-tracking data. The discharge location is home to the Bullen Bay storage facility. The vessel was carrying a cargo for Vitol, Bloomberg reported last week.

Separately, the Kelly, a very-large crude carrier, arrived at Castries on Saint Lucia on Jan. 18 to offload 1.9 million barrels of Merey, according to the data. The delivery is the first shipment of Venezuelan crude to the Caribbean island since Dec. 2018, according to Kpler and Vortexa.

Castries is home to a storage facility that’s primarily operated by Houston-headquartered Buckeye Partners LP. Bloomberg News couldn’t identify the company or entity responsible for the oil trade.

Buckeye Partners is helping bring Venezuelan crude to market safely and responsibly by leveraging its operational expertise and strategically positioned infrastructure, the company said in a statement. The group is operating in accordance with all applicable laws, it added.

Meanwhile, VLCC Marbella reached South Riding Point in the Bahamas on Jan. 19 with about 1.9 million barrels, according to the data, another vessel carrying a Vitol cargo. A third supertanker — Rene — is laden with more than 1.7 million barrels and due to arrive in the Bahamas later this week.

Prior to Washington’s intervention, Venezuela relied on dark-fleet tankers to export its oil and most flows headed to China, a key market for bitumen-rich grades such as Merey. Now, cargoes are being offered to a wider range of destinations, including Indian and US Gulf Coast refiners.

The market is keenly watching for other tankers heading to Venezuela to load crude, as more vessels openly signal their intention to be involved in the trade. The Gloria Maris indicated earlier this week that it’s bound for “VEJOT” — a typical reference to the main José oil-export terminal. The Suezmax is currently ballasting off the port, with Vortexa listing its controller as Trafigura.

--With assistance from Jason Rogers.

(Updates with Buckeye Partners comment in eighth paragraph and Venezuela-bound tanker in the final paragraph.)

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