US oil corporations are boosting their oil sales in the global market. Recently, US Congress lifted the long-lasting ban on oil exports. Thus, unleashed from restrictions, American shale oil is flooding markets. OPEC countries are among the first buyers, who signed contracts with US oil exporters. According to well-informed sources, the Eagle Kuantan tanker is to ship the first batch of crude to Bullenbay, a port in Venezuela. The destination is a refinery of local oil and gas corporation PDVSA.
Interestingly, Venezuela itself has vast oilfields, which are exploited to supply crude, in particular to the US. According to the US Energy Information Administration, the country bought Venezuela’s oil at a rate of almost 800,000 BPD over 2015. A logical question is why the Latin American country imports oil? Sometimes, it is cheaper for a country to buy a commodity than to produce itself. However, it is not the case. The answer is simple. Crude pumped from Venezuela’s oilfields is not of top quality. These grades are termed heavy. Therefore, local producers found a solution to overcome technological difficulties. They import light sweet crude and mix it with local grades.
Before Venezuela made contracts with US suppliers, light crude had been delivered to Latin American refineries from Angola, Nigeria, and Russia. However, as soon as US oil exporters entered the oil market, Venezuela’s authorities immediately opted for US shale oil. Commodity experts warn that US shale producers are obviously contributing to the global oil glut, putting a downward pressure on a crude barrel.
