Venezuela, which is currently in a deep political and economic crisis, has sent two fully-laden large crude carriers heading to Singapore. The vessels – the New Dream chartered by PetroChina and the Trafigura chartered by Britanis – are carrying 270,000 tons each of fuel oil from the Bonaire Terminal owned by Petroleos de Venezuela. The New Dream is currently in the East Indian Ocean and is expected to arrive in Singapore on July 8, while the Britanis is off the East Coast of Brazil and is due to arrive in Singapore on August 1. Analysts have described the shipping as a surprise move that could however relax the Singaporean market.
Although Venezuelan shipments to Singapore have been sporadic and uneven, the city-state has taken almost 1 million tons over past three weeks from the Latin American country. In the last week of June, Singapore’s net fuel oil imports were at an 8-week high of 1.14 million tons of which Venezuela contributed 563,000 tons. Traders commented that imports were surprising to some and could help ease a tight Singaporean market expected this month due to fewer arbitrage flows during the past three months. “That might explain why time spreads got hammered at the end of June and beginning of July,” said one Singapore-based trader.
Venezuelan crisis has had a negative impact on its oil sector affecting the output, which has fallen by 11% since mid-2015 to around 2.37 million barrels per day. As of January 2014, the proven oil reserves in Venezuela are recognized as the largest in the world totalling almost 300 billion barrels and thus surpassing Saudi Arabia’s 265 million barrels as per official numbers from 2009.