- Sales of Venezuelan oil for October loading stalled as a surge in shipping costs muddled negotiations between the country's state oil company and buyers.
- Shipping costs, a key component of the delivered price, have more than doubled from the end of August, making Venezuelan crude less competitive with Canadian barrels for US refiners.
- Canada and Venezuela are the largest suppliers of foreign oil to the US, so the freight-driven blowout in Venezuelan delivered prices shifts the US refiner sourcing mix toward Canadian barrels.
Quotes
“Shipping costs — a key component of the delivered price — have more than doubled from the end of August.”
“That’s making Venezuelan crude less competitive with Canadian barrels for US refiners and snarling sales deals, according to people with knowledge of the situation.”