September 25, 2019 / 6:39 PM / 24 days ago

Venezuela boosting oil exports to Cuba as U.S. ramps up sanctions: sources

PUNTO FIJO, Venezuela/MEXICO CITY (Reuters) - Venezuelan state oil company PDVSA ordered an increase in exports to ally Cuba to ease fuel shortages on the island this month, challenging U.S. sanctions on shipping firms involved in the trade, according to three industry sources and Refinitiv Eikon data.

The U.S. Treasury Department on Tuesday imposed fresh sanctions on four maritime companies and vessels transporting Venezuelan oil to Cuba, a move that follows several measures this year aimed at stopping the oil flow to the island.

The United States has been seeking to increase pressure on the administration of Venezuelan President Nicolas Maduro, to try to dislodge him from power.

Venezuela’s Foreign Minister Jorge Arreaza said on Tuesday that his country would continue working with Cuba, while Cuban President Miguel Diaz-Canel said Washington was trying to implement a “brutal and genocidal” policy of tightening the blockade and obstructing oil shipments.

Two tankers set sail this week from PDVSA’s ports and at least nine more are lining up to load crude and fuel bound for Cuba, according to the data and sources. So far in September, the Venezuelan firm has exported 119,000 barrels per day (bpd) of crude and fuel to Cuba, an increase from 70,000 bpd in August, the Eikon data showed.

PDVSA did not reply to a request for comment. Cuba’s Foreign Affairs ministry did not immediately reply to an information request.

Cuba has struggled to find vessels for imports since the United States imposed sanctions on several maritime companies for carrying oil to the country, its government has said.

The situation has particularly curtailed purchases from countries other than Venezuela, according to the Eikon data.

PDVSA is now using a large portion of its own fleet, mostly operated by its unit PDV Marina, to transport the oil to Cuba.

“They want to use almost all PDVSA’s fleet. It’s a strategy to continue exporting to Cuba as tanker operators don’t want to touch Venezuelan ports for fear of sanctions, even less to touch Cuba,” one of the sources said.

PDV Marina’s tankers lining up to load crude, diesel, gasoline and fuel oil bound for Cuba include the Icaro, Yare, Paramaconi, Terepaima, Manuela Saenz and Luis Caceres de Arismendi. They fly the flags of Venezuela and Panama and have mostly remained in Venezuelan waters in recent years.

Tankers Petion and Sandino, owned by a joint Venezuela-Cuba firm, Transalba, are also covering the route, according to the data.

Venezuela started sending oil to Cuba in 2000 under a bilateral pact signed by late Presidents Hugo Chavez and Fidel Castro. The oil flow averaged 90,000 bpd until 2016, decreasing since then due to Venezuela’s falling output and sanctions.

Reporting by Mircely Guanipa in Punto Fijo and Marianna Parraga in Mexico City. Additional reporting by Sarah Marsh in Havana; Editing by Frank Jack Daniel and Rosalba O'Brien

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