New Delhi, Oct 31 (KNN) Indian refiners may import crude oil from Venezuela at a discounted rate after the US eased sanctions on oil from the Latin American country, according to a report by S&P Global Commodity Insights.

“Coker complexes have been operating at full capacity or even overcapacity recently, primarily due to the increased processing of cheap high-sulfur Russian Urals crude. This situation has left limited room for Venezuelan grades,” said Sumit Ritolia, refinery economics analyst at S&P Global.

In the next six months little change is expected in Venezuelan oil production capacity as its state-run oil company PDVSA has “little to no investment capital and much of the oil-related infrastructure is in a poor state of repair”, said the report.

Venezuela’s current capacity lies between 800,000 and 850,000 barrels per day (bpd) with the production sitting around 750,000 bpd.

Earlier this month, the US eased sanctions on Venezuela after its government and opposition agreed to have next year’s election monitored by international observers. The US’ move opens up the possibility for recovery and production growth in the medium to long term, assuming the political agreements are respected, S&P Global Commodity Insights added.

It noted that India used to be a regular buyer of Venezuelan crude oil grades prior to the imposition of US sanctions. During the pre-sanctions period from 2017 to 2019, India imported approximately 300,000 bpd of Venezuelan crude grades, with private refiners being the key buyers. These imports represented around 5-7% of India’s total crude oil imports during that time, S&P Global data showed. 

(KNN Bureau)