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Venezuela oil shipments plunge in wake of US sanctions



Venezuela’s oil shipments have reportedly fallen sharply since the US hit the country with energy sanctions.

Reuters reported Thursday that oil shipments from the country dropped 40% to 920,000 barrels per day over the past month.

The Trump administration said in January it would impose economic penalties against PDVSA in an attempt to cripple the government of President Nicolas Maduro, who is facing global pressure to cede power to opposition leader Juan Guaidó.

While the country’s oil output has fallen sharply in recent years, it had until 2019 been a major source of heavy crude for the US. Most of Venezuela’s shipments over the past month have gone to India, Singapore and China.

Oil revenue in Venezuela has in the past accounted for for 98% of export earnings, according to OPEC.

Analysts say the sanctions, along with output reduction among OPEC and other major producers, could point to a heavy crude squeeze ahead.

“With these production agreements, those countries that have cut production made it abundantly clear that they would cut lower-value heavy crudes first,” Ashley Petersen, a senior oil analyst at Stratas Advisors, said in a recent interview. “Add to that the issues in Venezuela, and then the shut-ins in Alberta and you suddenly have less heavy than expected.”

Oil prices were mixed Thursday afternoon, with West Texas Intermediate trading just over $57 per barrel and Brent around $66.

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