One consequence of Venezuela’s collapse has been the drawdown in crude inventories across the Caribbean.
Storage tanks began to drain more than a year ago and haven’t stopped. The imposition of US sanctions against Venezuela’s state-owned oil company PDVSA in late January has only accelerated the declines.
Certain locations, like Aruba and Curacao, are nearly empty.
The Caribbean has long served as an extension of Venezuela’s oil industry, supplying crude to refineries on various islands or using storage tanks as a staging ground for re-exports.
Of course, times have changed. Venezuela’s financial troubles have played out across the Caribbean where creditors have sought to claim assets for unpaid bills.
The risk of assets being seized has led Venezuela to send fewer tankers to the Caribbean.
While not the only country to export to the Caribbean, Venezuela has historically been by far the biggest source of supply followed by Colombia.
The impact on Caribbean storage has been obvious. This graph shows Caribbean inventories measured by Ursa every week using synthetic aperture radar:
PDVSA owns or leases storage on the Dutch islands of Aruba, Bonaire and Curacao, as well as St. Eustatius.
The same downward trend can be seen there, especially once sanctions kicked in:
Here’s a look at Curacao:
The loss of Venezuelan supply can certainly be felt on the Gulf Coast where refineries are configured to run on the heavy sour crude that Venezuela produces.
The drawdowns in the Caribbean serve as a reminder of how Venezuela’s upheaval has spilled across an ocean.