Venezuela's crude oil exports continue to be depressed by difficulties experienced by US refiners obtaining the letters of credit (L/Cs) they need.

The impact of the L/C shortage is now evident with Venezuelan crude imports to the US in November falling to their lowest level since January 2003.

Sanctions biting

Venezuelan state-run oil company Petroleos de Venezuela S A (PDVSA) and its joint ventures exported 475,165 barrels per day to its US customers in November, down 36 per cent from the same month in 2016 and 12 per cent down on October.

Sanctions imposed by the US on Venezuela have had a negative impact on the ability of the company's customers to obtain L/Cs needed to complete some imports.

Reluctant banks

Banks meanwhile are increasingly reluctant to open L/Cs for transactions involving entities named as or connected to individuals or firms proscribed in the most recently introduced sanctions on Venezuela (DC World News, 27 November 2017).

Earlier this year it emerged that a US company, PBF Energy, had made several unsuccessful attempts to find a bank willing to provide the L/C required to discharge Venezuelan oil from its tanker (DC World News, 4 September 2017).

Imports of Venezuelan crude reached their 2003 low point when a strike depressed PDVSA's production.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.