By Pietro Lombardi, Shariq Khan, Ahmad Ghaddar and Robert Harvey
Jan 22 (Reuters) – Trading house Trafigura has sold its first cargo of Venezuelan crude oil as part of a 50-million-barrel supply deal between Caracas and Washington, industry sources said on Thursday, with Spanish refiner Repsol set to take the shipment.
The cargo is expected to be delivered to Repsol around mid-February, two of the sources said.
Trafigura and Repsol declined to comment.
The deal would mark one of the first sales of Venezuelan oil to Europe since the United States captured the South American country’s leader earlier this month and then struck agreements with Caracas to export up to 50 million barrels of its oil.
Besides the Trafigura cargo bound for Spain, rival commodities trading house Vitol is shipping a cargo of Venezuelan oil to its Saras refinery in Italy as part of the initial deal with the U.S. government, several industry sources told Reuters earlier on Thursday. Vitol declined to comment.
Both Trafigura and Vitol were tapped by Washington to facilitate initial exports of Venezuelan oil that had been filling storage tanks due to a U.S. blockade of the country. The traders also agreed to supply naphtha to the South American country as part of efforts to help revitalize its oil production.
Venezuelan oil is extremely high density and only a few European refineries can process it easily, trading sources said.
Repsol, which operates five refineries in Spain, was previously a regular importer of Venezuelan crudes and has the capacity to refine heavier barrels, making it one of the top candidates to continue buying from the trading firms, the trading sources said. Repsol is also in the process of applying to regain its own U.S. licence to export oil from Venezuela.
While the Venezuelan oil will be sold in the global marketplace, the U.S. government has required that the majority of it be sold to the United States, an administration official said on Thursday.
So far, Vitol has struck deals to sell cargoes to U.S. refiners Valero Energy and Phillips 66, Reuters reported on Wednesday.
The trading houses have been marketing Venezuelan oil to refiners in India and elsewhere too.
The U.S. government is allowing China to purchase Venezuelan oil only if it does so at “fair market prices”, an administration official told Reuters on Thursday.
(Reporting by Pietro Lombardi, Shariq Khan, Ahmad Ghaddar, Robert Harvey, Arathy Somasekhar and Georgina McCartneyEditing by Alex Lawler, Elaine Hardcastle and Nia Williams)
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