Citgo dismisses LPG supply plan for Venezuela

Photo: Marco Bello – Reuters

 

Citgo, the US refining arm of Venezuelan state-owned PdV, told Argus it has no immediate plan to supply LPG to Venezuela under new US authorization for sale of the cooking fuel to the Opec country.

By Argus – Patricia Garip

Jul 13, 2021

“We are aware that OFAC recently issued General License 40, authorizing certain transactions involving the exportation of LPG to Venezuela,” Citgo said, referring to the US Treasury Department’s Office of Foreign Assets Control (Ofac) that administers sanctions. “At this time, CITGO has no plans to engage in this activity.”

Although LPG trade was never explicitly banned by the 2019 oil sanctions on Venezuela, suppliers had shied away in cautious overcompliance.

Citgo’s stance is consistent with other US product traders that have said they are unlikely to resume supplying LPG to Venezuela in spite of the new clearance, reinforcing the largely symbolic nature of the US license.

Among the suppliers’ concerns are PdV’s credit-worthiness, market tightness and a prohibition on crude swaps that would have made LPG transactions with Caracas more commercially appealing.

But the license issued yesterday had spurred some speculation that Citgo would be an exception because it is nominally controlled by Venezuela’s US-backed political opposition since 2019, when the US recognized opposition leader Juan Guaido as president of an interim government and imposed oil sanctions to force President Nicolas Maduro out of power. PdV itself remains under the control of Maduro’s government in Caracas.

Read More: Argus – Citgo dismisses LPG supply plan for Venezuela

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