Ship Carrying Iran Light Oil Docks in Venezuela in U.S. Sanctions Violation

(Bloomberg) -- Venezuela's state-owned oil company has received its first 2022 shipment of condensate from ally Iran, a key input needed if it's going to successfully ramp up output to its ambitious 1.5 million-barrel-a-day goal.

A ship carrying 2 million barrels of the hydrocarbon used to thin the country's extra-thick crude has arrived at the Venezuelan port of Jose, according to a person familiar with the situation. Shipping documents list the vessel's contents as “cracked material,” the person said, noting that it's actually carrying condensate.

The ship is identified in internal documents as the “Stharla,” according to the person with knowledge of the situation -- though there are no records of a vessel by that name; there is a Starla registered in Iran. It's customary to disguise the names of ships in Venezuelan ports and turn off satellite transponders so vessels don't get tracked violating U.S. sanctions against the regime of President Nicolas Maduro.

This marks the fifth shipment of condensate state-owned PDVSA has received from Iran since September 2020. Venezuela imported 2 million barrels of Iranian condensate in 2020 and 4.6 million barrels in 2021, snubbing U.S. oil sanctions on the country. Iran has also stepped in to help its South American ally with engineers, refined products and spare parts for its oil industry. PDVSA doubled its oil exports in December from a year earlier, in a sign of recovery for its industry.

Petroleos de Venezuela SA declined to comment.

The vessel's arrival comes at a crucial time for Venezuela, which aims to pump over 1.5 million barrels a day in 2022 to keep its crisis-hit economy afloat. It has seen output dwindle over the past weeks, according to a person familiar with output levels who asked not to be identified discussing the situation. Currently, production is lower than 1 million barrels a day, the person said.