The Suezmax sized oil tanker Karvounis lies at anchor stranded off the coast of Louisiana for lack of a bank letter of credit to discharge its cargo of Venezuelan heavy crude, south of Port Fourchon, Louisiana, US. -Reuters
A tanker carrying a cargo of about 1 million barrels of Venezuelan heavy crude has been stranded for more than a month off the coast of Louisiana for lack of a bank letter of credit to discharge, three sources have told Reuters.
The cargo's fate adds to state-run oil company PDVSA's precarious financial position. Revenue from the company's oil sales, which have suffered because of low prices and declining production, account for more than 90 percent of the nation's exports.
Major banks are cutting exposure to Venezuela as a result of political upheaval in the South American country. Some have closed accounts linked to officials of the OPEC member who have had sanctions leveled against them by the US government and have refused to provide correspondent bank services or trade in government bonds.
Credit Suisse this month barred operations involving certain Venezuelan bonds and is now requiring that business with President Nicolas Maduro's government and related entities undergo a reputation risk review. The United States is considering further economic sanctions that would dry up the country's access to Wall Street. PDVSA and its joint ventures exported 638,325 barrels per day (bpd) to the United States in July, 22 percent less than the same month of 2016, according to Thomson Reuters Trade Flows data.
The tanker Karvounis carrying Venezuelan oil is anchored at South West Pass off the coast of Louisiana, according to Reuters vessel tracking data. PBF Energy Inc, the intended buyer of the cargo, has been trying unsuccessfully to find a bank willing to provide a letter of credit to discharge the oil, according to two trading and shipping sources.
Crude sellers typically request letters of credit from customers that guarantee payment within 30 days after a cargo is delivered. The documents must be issued by a bank and received before the parties agree to discharge.
-Reuters, Mexico City
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