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Chevron CEO: Exports of Venezuelan crude oil to resume in this month

Chevron's CEO stated on Friday that the company expects to resume its Venezuelan crude exports to the United States this month. This follows a limited license issued by the Treasury Department this week to operate within the sanctioned nation and to do oil swaps.

In a conference call to announce the company's quarter-end results, Chevron CEO Mike Wirth said that exports would begin with "a limited amount" and that he did not expect that flows will have a significant impact on the third-quarter results.

Chevron has suspended its exports of Venezuelan crude oil since April when the state-owned PDVSA cancelled cargoes that it had planned for its joint venture partner due to payment issues related to U.S. sanctioned against Venezuela.

In March, the U.S. administration of President Donald Trump revoked Chevron's license that was granted under former president Joe Biden. Trump's administration gave Chevron, along with a few PDVSA partners, until late May to complete transactions.

Washington reinstated Chevron’s license last month after a successful prisoner exchange with Venezuela. Members of Congress in the United States also urged granting oil authorizations to stop Venezuelan barrels going to China.

According to sources within the company, PDVSA has not yet authorized its European partners to resume operations or export oil into their refineries in Venezuela.

According to vessel movement data, Chevron had exported around 250,000 barrels of Venezuelan crude per day in the first three months before the licenses were cancelled. This was 29% of Venezuela's total exports.

According to U.S. officials and sources, the new authorization is similar in nature to that of Biden's license but prohibits payment to Venezuelan President Nicolas Maduro’s administration using any currency.

Chevron and the cash-strapped PDVSA have been in negotiations since Washington approved the license.

Sources said that the agreement is likely to include payment of mandatory royalties to Venezuela, either in kind or by way of oil swaps. Chevron could provide Venezuela with diluents.

Shipping sources say that Chevron Venezuela also ordered a new inspection of PDVSA loading terminals before any vessel chartering contract.

U.S. Gulf Coast Refineries Snapped Up

higher volumes

Ship tracking data revealed that in July, the United States imported Middle Eastern and South American crudes to compensate for the Venezuelan barrels lost.

Matt Smith, lead oil analyst at Kpler, said: "Although deliveries will return to the U.S. within a short time, comments by CEO Mike Wirth suggest that we shouldn't be expecting a quick rebound to volumes seen earlier this year."

(source: Reuters)