Vitol, Trafigura seek $18 to $20 discount on Venezuelan oil
by@Reuters
Summary
Global oil trading firms Vitol and Trafigura are advocating for significant discounts on Venezuelan crude oil amidst a surge in shipping costs, according to sources. They are aiming for discounts between $18 to $20 per barrel below Brent prices as rising freight rates pressure their profit margins. Recently, the cost to charter tankers from Venezuela has escalated dramatically, with Aframax tankers now costing approximately $3.5 million, significantly up from earlier this year. This situation arises as Venezuela's oil sector has been recovering from severe US sanctions, and these trading houses now manage over half of the country's oil exports.
Analysis
PDVSA: PDVSA is Venezuela's state-owned oil company responsible for production, exports, and marketing of the country's crude oil. It has been working to increase direct sales to refineries and stabilize export volumes after years of sanctions. PDVSA now faces renewed pressure from trading houses seeking deeper price cuts to cover rising shipping expenses. Vitol: Vitol is a major global energy and commodities trading company that buys, sells, and ships crude oil and refined products. It has become one of the largest players in Venezuela's oil sector following the US-led reopening of the country's energy industry in early 2026. In the current news, Vitol is actively negotiating steeper price discounts on Venezuelan Merey crude to offset sharply higher tanker charter costs. Trafigura: Trafigura is a leading independent commodities trading firm specializing in oil, metals, and other energy products, with extensive physical trading and shipping operations. Along with Vitol, it has taken a dominant role in handling Venezuela's crude exports since sanctions eased in January 2026. The company is currently pressing PDVSA for larger discounts on cargoes to the US and Europe to maintain margins amid record freight rates. Freight Market: Tanker charter rates have reached record highs in recent weeks due to the largest wave of attacks on global shipping since the US-Iran conflict began in late February. Venezuela Oil Sector: Venezuela's oil exports have been recovering following the easing of US sanctions at the end of 2025, with trading firms now handling more than half of the country's crude shipments.
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macropolitics