Venezuela is about to send 2 million barrels of heavy crude to Iran

Venezuela is about to send 2 million barrels of heavy crude to Iran

On Saturday a Venezuelan supertanker was about to set sail from Iran-affiliated waters, carrying 2 million barrels of heavy crude imported by state-run oil firm PDVSA, according to documents seen by Reuters and vessel tracking services.

The shipment is part of a deal achieved by PDVSA and its Venezuela counterpart National Iranian Oil CompanyIranian Oil Company NIOC that exchanges crude from Iranian condensed petroleum for Venezuela's Merey crude. The swaps aim to ease an acute shortage of diluents that has cut Venezuela's oil output and exports, Reuters reported last month; Dino I, a very large oil carrier VLCC owned and operated by NIOC's National Iranian Tanker CompanyIranian Tanker Company NITC, loaded the Venezuelan oil at PDVSA's Jose port late Friday, according to documents, a source and monitoring service

The bilateral oil trade could be a violation of U.S. sanctions on both nations, Reuters revealed last month in the U.S. Treasury Department citing government orders which establish the punitive measures.

The vessel arrived in September with its transponder switched off while carrying 2.1 million barrels of Iranian condensate to Venezuela. The light oil fed PDVSA Petrolera Sinovensa, Petropiar and Petrocedeno projects in the Orinoco Belt of the country.

A second condensate cargo of similar size is expected to be delivered to Venezuela in the next few weeks as part of the swap routine, which will remain in effect for six months in its first phase.

Venezuela's oil ministry, PDVSA and NIOC did not respond to requests for comment.

PDVSA first launched the exchange last month by importing 1.9 million barrels of Merey heavy crude from the Iran-flagged supertanker Felicity.

The exchange provides the OPEC nation with a stable supply of blending material needed to convert its extra heavy oil into exportable grades. The pact also provides heavy oil to Asian customers for blending, refining or marketing to Iranian customers.

Iran and Venezuela have strengthened cooperation in the last year even under the watchful eye of the United States, which has reimposed sanctions on Iranian state entities in recent years including NIOC and blacklisted PDVSA in 2019.