FILE PHOTO: Trafigura logo is pictured in the company entrance in Geneva, Switzerland March 11, 2012. REUTERS/Denis Balibouse/File Photo
By Julia Payne
GENEVA (Reuters) - Global commodities firm Trafigura has decided to stop trading oil with Venezuela due to U.S. sanctions on the OPEC nation's energy sector, a source with direct knowledge of the matter said.
The decision will come as a blow to Caracas as Swiss-based Trafigura has a long-standing arrangement with state-run PDVSA to take Venezuelan crude and, in exchange, supply the Latin American country with refined products.
Washington imposed fresh sanctions on PDVSA last month to cut off a key source of revenue for President Nicolas Maduro. The move came after congress head Juan Guaido invoked constitutional provisions to become interim president, arguing that socialist Maduro's re-election last year was a sham.
Last year, trading company Trafigura directly took 34,000 barrels per day (bpd) of Venezuelan crude and products, which were mostly resold to U.S. and Chinese refineries, according to internal PDVSA trade documents seen by Reuters.
Trafigura will stop business with PDVSA after completing a small number of already-concluded trades, the source said.
Due to the size of Venezuela's oil-for-loan agreements with China and Russia and the weight of previous U.S. sanctions, cash-strapped PDVSA has become increasingly reliant on intermediaries to export its crude and import refined products.
PDVSA did not immediately respond to a request for comment.
Trafigura is due to load two cargoes of Venezuelan crude before the end of February, the source with direct knowledge and a shipping source said.
It was not immediately clear whether these two tankers were the last of the already-concluded trades, or how many - if any - product tankers would be sent in return.
For the trading firm, the decision means giving up a source of crude supply for Russia-backed Indian refiner Nayara Energy, in which Trafigura holds a near 25 percent stake.
Nayara would still be able to buy Venezuelan crude through Russia’s Rosneft and other intermediaries.
The U.S. sanctions limit U.S. refiners to paying for Venezuelan oil by using escrow accounts that cannot be accessed by Maduro's government. Foreign firms that use the U.S. financial system for oil trading or U.S. units are similarly restricted, cutting off avenues for PDVSA to collect revenue.
In an effort to ease domestic fuel shortages, PDVSA's imports skyrocketed last year. Its own refining system is hobbled by technical failure, a lack of investment, delayed maintenance and insufficient crude supply.
In the last three months of 2018, Venezuela exported about 1.45 million bpd of crude and products. Trading houses lifted 225,000 bpd of that, according to the PDVSA documents and Refinitiv Eikon data.
Exports to the United States, Venezuela’s primary export customer, have since dried up, as well as those to other destinations, with loaded tankers left stranded off Venezuelan ports.
(Reporting by Julia Payne; Additional reporting by Marianna Parraga in Mexico City; Editing by Dale Hudson)