Trafigura readies first Venezuelan oil ship as part of mega sale

[HOUSTON] Commodities trader Trafigura Group is getting ready to load its first ship of Venezuelan crude after the US government moved to assert control over the country’s oil.

“We are working with your administration, Mr President, to bring that Venezuelan oil to the United States,” Trafigura’s chief executive officer Richard Holtum said to Donald Trump during a meeting the US leader convened with nearly 20 industry representatives at the White House on Friday (Jan 9).

“Our first vessel should load in the next week,” Holtum said.

It’s been about a week since the US military captured Venezuelan leader Nicolas Maduro, and the Trump administration is moving quickly to try to rebuild Venezuela’s dilapidated oil infrastructure. Trump had said Venezuela would relinquish as much as 50 million barrels of its oil for the US to sell, valued at about US$2.8 billion at current market prices.

Trafigura and Vitol Group have obtained preliminary licenses from the US Treasury to help market the pledged Venezuelan crude oil. The traders have been notifying US refiners to gauge interest for the oil, with sales expected to kick off on Monday.

Still, at the Friday meeting, major US oil executives expressed caution about reentering Venezuela, even as Trump pressured their companies to spend at least US$100 billion to revive the country’s crude oil production.

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While oil producers have expressed that hard work remains before major new investments can get underway, oil traders and US refiners are rushing to position for access to Venezuelan crude. An extra 50 million barrels would represent one of the largest unexpected supply flows in years.

At the White House meeting on Friday, Vitol’s Americas CEO Ben Marshall said that his trading firm was also aiming to bring Venezuelan oil into the market “as quickly as we can”. BLOOMBERG