China’s Unipec Bans Venezuela-Linked Oil Tankers

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October 10, 2019


reuters logo By Devika Krishna Kumar and Collin Eaton NEW YORK/HOUSTON, Oct 10 (Reuters) – China’s Unipec, the trading arm of Asia’s top oil refiner Sinopec, has banned the use of vessels linked to oil flows from Venezuela in the last year, according to sources familiar with the matter and a contract clause seen by Reuters on Thursday.

Last week, Exxon Mobil Corp also barred the use of vessels that touched Venezuelan ports in that time.

Key crude tanker rates across the world have surged in recent weeks following U.S. sanctions on a Chinese shipping company that allegedly kept buying from Iran against U.S. wishes, and following decisions by Exxon and Unipec to cut off shipments from Venezuela-linked tankers.

Shipping rates on routes such as the U.S. Gulf Coast to Asia have surged to a record $13 million for supertankers as refiners and merchants scramble to secure crude oil tankers.

Unipec’s contract clause mandates that the vessels the firm charters have not called at a port or place in Venezuela in the past one year, according to the notice seen by Reuters. Unipec and Sinopec could not immediately be reached for comment.

Washington imposed several rounds of sanctions on Venezuela this year in an effort to oust socialist President Nicolas Maduro, whose 2018 re-election has been dismissed by the United States and dozens of other countries as a sham. Maduro has denounced Venezuelan opposition leader Juan Guaido as a U.S. puppet who is seeking to foment a coup. Some measures have led tanker operators to stop carrying oil for Venezuela’s state-run PDVSA oil firm.

Those moves have come concurrently with the U.S. decision in late September to sanction two units of China’s COSCO, which operates more than 50 supertankers, alleging the units violated U.S. sanctions on Iran.

China’s CNPC and its units Chinaoil and PetroChina stopped loading Venezuela crude in August, following U.S. sanctions on the nation, according to sources close to the trade. (Reporting by Devika Krishna Kumar in New York and Collin Eaton in Houston and Marianna Parraga in Mexico City Editing by Chris Reese and Matthew Lewis)

(c) Copyright Thomson Reuters 2019.

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