Venezuelan crude imports into LOOP tripled on year: In The LOOP

Imports of Venezuelan crude into the Louisiana Offshore Oil Port have totaled over 7 million barrels from January to November this year, almost three times the 2.5 million barrels in the same period of 2016, according to US Customs data.

The dramatic climb came despite the Trump administration's threats to ban Venezuelan crude imports into the US and the shutdown of US Gulf Coast refineries due to hurricanes Harvey and Nate.

Market sources have said that the main reason behind the increasing number of Venezuelan crude barrels going to LOOP has been declining imports of Saudi Arabian crude due to the OPEC production cuts on heavy sour crudes this year. From January to November, imports of Saudi Arabian crudes into LOOP were 42 million barrels, a drop of 45% from 76 million barrels imported in the same period of 2016, according to Customs data.

In 2016, Marathon and PBF Holdings bought a total of 2.5 million barrels of Venezuelan crude. Four Aframax-sized cargoes of medium-grade Zuata crude were imported by Marathon, while one 250,000-barrel cargo of Merey 16 was bought by PBF Holding, the Customs data showed.

However, so far in 2017, Marathon has increased its Venezuelan imports to an average of two Aframaxes monthly, the data showed.

Historically, Zuata, Morichal, Merey and DCO are the most common grades headed into LOOP.

However, in September 29 of this year, trader Trafigura imported one rare cargo of light, sweet Santa Barbara crude into LOOP. The cargo was loaded at the port of Amuay Bay, Venezuela.

Typically, most cargoes of Venezuelan crudes are loaded at the port of Jose.

According to market sources, the 500,000 barrel-cargo of Santa Barbara crude was part of a litigation between Venezuelan state oil company PDVSA and one of its creditors, Russian shipping company Sovconflot.

The cargo was confiscated by Sovconflot from PDVSA and sold in an auction to Trafigura.

The SCF Baikal is also scheduled to arrive at LOOP on Tuesday with a Venezuelan crude cargo loaded at Jose, according to cFlow, Platts trade flow software.

MORE MAYA, LESS VASCONIA IMPORTS

Behind the Venezuelan imports, the other Latin American crude that has seen an increasing demand at LOOP has been Mexican heavy sour Maya. In the first 11 months of this year, 5.3 million barrels of Maya was imported in 11 different cargoes into LOOP, compared with 3 million barrels in the year-ago period.

Abundant supplies and more competitive prices for Maya due to intermittent refinery outages in Mexico this year have pushed US refiners to opt for the Mexican grade over Colombian medium-grade Vasconia, according to market sources.

A total of 23 cargoes carrying 10.5 million barrels of Vasconia were brought to LOOP in the first 11 months of 2016, with Marathon and ExxonMobil on the buying side.

However, so far in 2017, only seven cargoes of Vasconia crude have arrived to the LOOP, six imported by Marathon and one by Trafigura, Customs data showed.

The 'In the LOOP' Americas crude oil wrap runs each Monday in Crude Oil Marketwire, North American Crude and Products Scan and on the Platts Global Alert. You can read the FAQ: USGC LOOP Sour crude here and find the full special report LOOP Sour Crude: A benchmark for the future here. Also be sure to download our LOOP app by searching for 'Platts LOOP' in your app store.