Venezuela's state-run PDVSA will begin exporting diluted crude oil (DCO) this week after a nine-month stoppage, it was reported in Caracas. The last time PDVSA shipped diluted crude to Asia was in April last year.
The extra heavy crude from the Orinoco Belt must be diluted with naphtha or condensate for transport and export, but trade sanctions imposed by the United States since 2019 have made it difficult to obtain these chemicals. But PDVSA has been receiving around 2.1 million barrels per month of condensate in exchange for supplying the National Oil Company of Iran with some 3.8 million barrels of its flagship Merey 16 crude. Compared to Merey, the DCO is often sold at a deep discount due to its high water and sediment content.
According to Reuters, a Panamanian-flagged supertanker has already loaded about 1.9 million barrels of DCO bound for Malaysia. The document accessed by the international news agency showed that onshore DCO stocks rose to 4.27 million barrels at the end of December, up from 3.5 million barrels stored in the same period of 2020.
The measure to export DCO could alleviate bottlenecks in production, storage and transportat of crude from the Orinoco.
Venezuela has also increased its gasoline production to nearly 160,000 barrels per day (bpd). The company is also producing around 38,000 bpd of diesel.
In December, PDVSA produced only 82,000 bpd of finished gasoline. It is unclear how long this level of production will last because many plants need to be replaced. Not all processing units are operating simultaneously, which could limit the variety and quality of fuels produced.