Players in Venezuelan oil trades have until 31 May to end their business with the South American country before running afoul of the US Treasury Department.
After US and Venezuelan officials admitted negotiations to extend sanctions relief had broken down, Washington formally issued a wind down of the six-month grace period first extended in mid-October.
The deal to allow state-run PDVSA to return to above-board trading was made following an agreement between Venezuelan President Nicolas Maduro and opposition parties on electoral reforms ahead of July’s voting.
The US said it would monitor further progress and potentially extend relief further.
But Washington judged that satisfactory progress was not made and in recent days both sides said talks had failed.
Venezuela’s departure is not expected to hit tanker markets hard.
Earlier this week, BRS Group said years of neglect caused production issues, with Venezuela only able to produce an additional 100,000 barrels per day. The extra barrels pushed exports to 650,000 barrels per day and total production to 900,000 barrels per day.
The broker had expected production to hit an extra 200,000 barrels per day on the low end and that the ships that had been lining up to load had now departed.
On Thursday, ABG Sundal Collier analyst Petter Haugen said Venezuelan exports had doubled, but only to 600,000 barrels per day, citing Vortexa data.
“Hence, there is only limited downside from any reductions here,” he said.
