Venezuela’s crude oil exports last month fell further, to a low of 359,000 bpd, Reuters reported, citing official data.

The decline was the result of the expiry of a grace period given by Washington to trading companies to wind down their business with PDVSA. This business most recently took the form of oil-for-fuel swaps, which were until now allowed under the U.S. sanction regime for humanitarian purposes.

As traders stopped taking in Venezuela crude, PDVSA saw its inventories swell. Last week, inventories at the port of Jose—Venezuela’s main oil export hub—reached 11.8 million barrels, the highest since August. This meant, according to Reuters calculations, that the company had about 3 million barrels in spare capacity yet. However, as new purchases from Eni, Repsol, or Reliance are unlikely to come, this could fill up fast, prompting a deliberate cut in oil production.

However, some companies still bought Venezuela crude in October, notably Thai Tipco Asphalt, which commissioned one cargo for delivery in October and at least two more—for delivery this month—according to Reuters. This made Asia the top destination for Venezuelan oil in October, taking in about a third of all exports.

However, there is a chance that PDVSA actually sent more oil abroad: the company, like its Iranian peers, has taken to ship-to-ship transfers to keep on exporting oil despite U.S. sanctions. As these transfers become increasingly frequent, the official export figures may become a less reliable sign of how PDVSA is faring than they used to be.

Meanwhile, however, the U.S. has demonstrated there could be some exceptions to the maximum pressure campaign: Italy’s Eni was allowed to start repairs on a floating storage and offloading facility in Venezuela, as concern about an environmental catastrophe mounted when the facility began tilting to its side. There are 1.3 million barrels of crude at the facility.

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By Irina Slav for Oilprice.com

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