Freight surge pushes Venezuelan oil exports to 8-month low

Tankers loaded 809,000 barrels a day of crude in October, down 25% from a month ago, according to shipping reports and U.S. customs data compiled by Bloomberg. Sales of October-loading Venezuelan oil hit a snag as the country’s state oil company resisted lowering prices to offset rising freight costs to keep its oil competitive against other producers, including Canada. Global shipping costs soared after ongoing fighting upended flows from the Middle East and Russia, sending ships on longer voyages to secure supplies, while sanctions enforcement reduced the pool of available tankers. On top of that, fall refinery maintenance in the U.S., Europe and Asia dented demand. Month-over-month U.S. demand fell 27%. China hasn’t purchased crude from Venezuela for 10 straight months. The cost to ship Venezuelan oil in Aframax tankers to top buyers in Texas, Louisiana and Mississippi ballooned to a multiyear high of $13.85 a barrel in early October, according to data from Argus Media. Rates have since fallen to $9.41, but remain at historically high levels.

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