Venezuelan petrochemicals arrive in U.S. despite Washington trade curbs

Photo: Carlos García Rawlins – Reuters

 

Venezuelan petrochemicals produced by joint ventures between state-run chemical firm Pequiven and foreign partners have arrived in the United States, despite Washington’s efforts to limit trade with the OPEC oil and gas producer.

By Reuters and 

Nov 19, 2021

At least two cargoes of methanol, a widely used industrial product whose prices have soared this year, have discharged at Houston area ports since October amid a rapid expansion of the South American country’s global sales of petrochemicals and oil byproducts, according to tanker tracking and U.S. customs data.

The shipments represent a new and unreported effort by Venezuela to boost revenues despite U.S. sanctions on its oil industry that cut vital crude exports to the lowest in 77 years.

U.S. sanctions were designed to oust President Nicolas Maduro, whose last election Washington views as a sham. Maduro insists the 2018 vote was free and fair.

Mitsubishi Corp (8058.T) resumed exports of methanol to the United States in 2021 from its Venezuelan joint venture Metor after a suspension of a couple years, a Mitsubishi spokesperson told Reuters. Metor’s shareholders include Petroquimica de Venezuela, or Pequiven.

Venezuela’s main oil port of Jose was listed as the point of origin on U.S. customs records of one of the two methanol shipments, but both sailed directly from Venezuela, Refinitiv Eikon tracking data showed.

Names of the buyers and sellers for the two methanol cargoes that arrived in Houston were redacted on the U.S. customs data, which were provided to Reuters by consultancy IHSMarkit.

The U.S. Treasury Department and the U.S. Customs and Border Protection agency declined to comment on the shipments.

Pequiven, which did not reply to Reuters requests for comment, said on Twitter in July that Metor was exporting methanol to Europe, South América and Asia.

WIDENING SANCTIONS

A U.S. executive order in 2019 subjected the Venezuelan oil industry to sanctions and this was used to blacklist state oil company PDVSA and its subsidiaries. A subsequent order broadened sanctions to cover companies owned or controlled by the government. State-run Pequiven and Venezuela’s petrochemical operations were not specifically named.

“Metor itself should not be subject to sanctions,” said Daniel Pilarski, a partner at New York-based law firm Watson Farley & Williams LLP who specializes in cross-border transactions and U.S. trade sanctions.

“However, if Pequiven were the ultimate originator of the methanol, then there could be a risk that any shipment to the United States would be treated as the indirect receipt of goods from Pequiven, which would be a violation, even if Pequiven never received payment,” Pilarski said.

Companies exporting Venezuelan methanol to the United States could obtain a license from the U.S. Treasury to permit the trade or take other steps to ensure Pequiven was not treated as the indirect seller, he said.

Methanol, produced in Venezuela from natural gas, can be found in everyday products including gasoline, paints, carpeting and plastics. U.S. imports have outweighed exports in recent years, according to IHSMarkit.

Read More: Reuters – Venezuelan petrochemicals arrive in U.S. despite Washington trade curbs

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