Venezuela's PDVSA resumes operations at El Palito refinery unit

Venezuela's PDVSA resumes operations at El Palito refinery unit

MOSCOW (MRC) -- Venezuela's state energy company Petroleos de Venezuela PDVSA has resumed operation at the catalytic cracking unit at the El Palito refinery, a government-allied legislator and seven sources familiar with the matter told Reuters.

The refinery's reactivation, almost one year after its stoppage, is a key move to alleviate the recent fuel shortage in the South American nation.

El Palito, the country's smallest refinery, is undergoing major repairs and expansion projects after a 100-million-euro deal signed with the state-owned Iranian National Company of Petroleum Refining and Distribution (NIORDC).

It has a production capacity of 146,000 barrels per day (bpd), and the plant's fluidized catalytic cracking (FCC) unit has already restarted with a production of 20,000 bpd, workers at the plant said. The unit is expected to be at full capacity by Monday, legislator Willian Rodriguez told Reuters.

Shaky operations and frequent stoppages in Venezuela's 1.3 million-bpd oil refining system have led to intermittent fuel shortages over recent years, forcing drivers to queue for hours to fill up their tanks.

Iran has provided the government of President Nicolas Maduro with fuel and diluents to convert its extra-heavy crude into exportable varieties and since 2020 it has been supplying parts to repair Venezuela's refining circuit.

We remind, PDVSA has allocated an oil cargo to a unit of Eni for a February loading, the first to the Italian firm following a contract suspension this year by new management at the state-run company, people familiar with the matter said. Eni and Spanish oil firm Repsol in May last year received authorizations from the U.S. State Department to take the crude to Europe for outstanding Venezuela debt and dividends, an exception to U.S. oil sanctions on Venezuela.

China's Unipec boosts Oman crude sales, caps oil prices despite Saudi cuts

China's Unipec boosts Oman crude sales, caps oil prices despite Saudi cuts

MOSCOW (MRC) -- China's Unipec, the trading arm of top Asian refiner Sinopec, has emerged as a major seller of August-loading Oman crude this month, a move that has helped to cap benchmark prices despite Saudi Arabia's plans to cut output next month, said Reuters.

Unipec, according to trade sources and data collated by Reuters, has sold 8 million barrels of Oman crude since the start of June on S&P Global's trading platform, also known as the Platts window and used to assess the Dubai price, benchmark for millions of barrels exported from the Middle East.

It was not immediately clear why Unipec was selling large volumes of Oman crude. Traders and analysts said tepid fuel demand from a slower-than-expected economic recovery has squeezed refining margins in China; plus Unipec and other Chinese refiners have been bringing in more barrels from Russia, West Africa, the United States and Brazil.

Sinopec did not respond to a request for more detail on the sales or the reasons behind them. Unipec sold the Oman cargoes to Totsa, trading arm of TotalEnergies, PetroChina Hong Kong , Shell and Trafigura, the data collated by Reuters showed.

The unusually large Oman crude sales began on June 1, traders said, just ahead of Saudi Arabia's surprise June 4 move to cut July output by 1 million barrels per day and as the world's biggest producer raised its official selling prices.

The trades helped cap spot premiums of benchmark Dubai prices to under USD1 a barrel for most of June, Reuters data showed, despite the prospect of tighter Saudi supplies. Unipec made no such sales in May, and in the last year it has typically sold less than 2.5 million barrels of Middle Eastern crude over the Platts window each month.

The sales have occurred as June crude deliveries to China are forecast to rise after hitting the third-highest monthly level in May, data from analytics firms Kpler and Vortexa showed.

In addition to a huge influx of Russian oil into China, June imports of U.S. crude are set to hit a record high of 30 million barrels, while more than 32 million barrels of West African crude will reach China, the Kpler and Vortexa data showed.

Unipec in recent months has been among those boosting oil purchases from West Africa, the U.S. and Brazil, traders said. Strong crude imports and refinery maintenance in the second quarter have also boosted China's commercial crude inventory to 962 million barrels, the highest since end-2020, said Emma Li, analyst from data analytic firm Vortexa.

Some 1.22 million barrels-per-day of refining capacity in China were shut for maintenance in May, according to a Reuters calculation. And Chinese state refiners lowered operating rates to about 76% in May from about 77% in April, according to data compiled by Longzhong consultancy.

The run cuts come as China's refining margins were assessed at about 461 yuan ($64.53) a ton in May, down 45% from April, Longzhong data showed. In contrast, the data also showed, margins at independent refineries known as teapots in the oil hub of Shandong province were around 1,136 yuan a ton as they binged on cheap oil from Russia, Iran and Venezuela.

We remind, Russia agreed to extend its existing 0.5 million bpd curbs into 2024, Angola and Nigeria agreed to give up their unused quotas. The United Arab Emirates was allowed to boost its production quota by 0.2 million bpd to 3.2 million from 2024.

Iran, Venezuela eye trade increase, sign petrochemical deal

Iran, Venezuela eye trade increase, sign petrochemical deal

MOSCOW (MRC) -- Iran and Venezuela want to increase bilateral trade to USD20 B, up from USD3 B, Iranian President Ebrahim Raisi said on Monday during a visit to Caracas, said Hydrocarbonprocessing.

During the visit the two countries signed a memorandum of understanding to expand cooperation in petrochemicals with a view to carrying out joint projects, building on their already-close cooperation in oil.

"We have decided to increase the cooperation between the two countries," Raisi said through translation in a statement with Venezuelan President Nicolas Maduro after the petrochemical deal and a dozen other cooperation deals were signed.

"The goal we have for commercial and economic cooperation, the first step is to take the level of cooperation to USD10 B," Raisi said. "The next step, we want to take it to USD20 B." He provided no time frame on the goal.

The governments, both under U.S. sanctions, provided no details of the petrochemical deal. Venezuelan state television said the accord between Venezuelan state petrochemical firm Pequiven and its Iranian counterpart would facilitate cooperation in oil exploration and development and assess the possibility of joint projects.

The countries also signed a deal to expand cooperation in mining, but provided no details.

We remind, Iran has provided fuel and diluents to convert Venezuela's extra-heavy crude into exportable varieties and since 2020 has supplied parts for repairs to the refining circuit. A unit of Iran's state-owned refiner NIORDC signed a €110-MM contract in May 2022 to make repairs at Venezuela's smallest refinery, El Palito, which has a capacity of 146,000 barrels per day. Iran is also set to be involved in a modernization project at Venezuela's largest refinery complex, partly to restore distilling capacity.

US imposes import ban on 2 Xinjiang-based companies

US imposes import ban on 2 Xinjiang-based companies

MOSCOW (MRC) -- The United States on Friday banned imports from China-based printer maker Ninestar Corp and a chemical company over alleged human rights abuses in China, according to a post for the Federal Register, said Europeansanctions.

Ninestar, whose website says it is the world’s fourth-largest laser printer manufacturer, and Xingjang Zhongtai Chemical Co Ltd, are being kept out of the US supply chain for participating in business practices that target China’s Uighurs and other persecuted groups, the US Department of Homeland Security (DHS) said in a statement.

Ninestar and its eight Zhuhai-based subsidiaries, along with Xinjiang Zhongtai Chemical, were added to the list for working with the government of Xinjiang to recruit, transport, transfer, harbour or receive forced labour of Uighurs, Kazakhs, Kyrgyz, or members of other persecuted groups, out of Xinjiang, according to the posting.

Polyvinyl chloride (PVC) trade flows within China may adjust in response to the US Department of Homeland Security’s (DHS) recent ban on imports on goods produced by Xinjiang Zhongtai Chemical. The DHS announced the ban on 9 June, which came into effect on 12 June. Xinjiang Zhongtai Chemical is a carbide-based polyvinyl chloride (PVC) producer located in China, with 1.8m tonnes/year of PVC production capacity.

We remind, a US ban on goods from China’s Xinjiang region came into effect on Tuesday, with the potential for damage to be inflicted on the Muslim-majority area’s solar power industry.

Reliance suspends Sikka diesel exports due to cyclone

Reliance suspends Sikka diesel exports due to cyclone

MOSCOW (MRC) -- Reliance Industries , which operates the world's largest refining complex, has suspended exports of diesel and other oil products from India's Sikka port because of a cyclone off the west coast of the country, said Reuters.

Reliance said in a letter sent to traders that it had declared a force majeure on exports from Sikka due to the storm, which weather forecasters say could hit India's western state of Gujarat and southern parts of Pakistan this week.

The 704,000 barrels per day (bpd) Jamnagar refinery is a major exporter of diesel, particularly to Europe which has sharply increased imports from Asia since the EU imposed a ban on Russian diesel in February.

Reliance did not immediately reply to a request for comment. Force majeure is a notice used to describe events outside a company's control, such as a natural disaster, which usually releases it from contractual obligation without penalty.

We remind, Reliance Industries Ltd has turned its sights on the domestic market, offering a high-performance diesel at a lower price than fuel sold by state-owned retailers. Jio-bp, the retail fuel joint venture of Reliance and bp will sell diesel mixed with detergents and dispersants at 1 rupee cheaper per liter than gasoil sold by the state-run companies, such as, Hindustan Petroleum Corp and Bharat Petroleum.