Caracas and Washington discuss exporting Venezuelan oil to the United States

Officials in Caracas and Washington are discussing exporting Venezuelan crude to U.S. refiners, five sources told Reuters, and Venezuela has millions of barrels stuck on tankers and in storage due to a U.S. blockade since mid-December.

Government officials in Caracas and Washington are reported to be in talks about exporting Venezuelan crude to refiners in the United States, Reuters sources said. The discussions concern oil that has been unable to ship since a U.S. export blockade was imposed in mid-December. The blockade followed rising U.S. pressure on President Nicolas Maduro's government and, the article reports, culminated in U.S. forces capturing him this weekend. Venezuela is reported to have millions of barrels loaded on tankers and in storage that it cannot move under current conditions. What is known: - Officials in Caracas and Washington have held talks about exporting Venezuelan crude to U.S. refiners, according to five government, industry and shipping sources cited by Reuters. - Millions of barrels are reported to be loaded on tankers and in storage and have been unable to ship because of a U.S. blockade since mid-December. - The article mentions Chevron as PDVSA's main joint venture partner; Chevron has been exporting about 100,000 to 150,000 barrels per day of Venezuelan oil to the U.S. under a U.S. authorization. - PDVSA has cut production because it is running out of storage, and further cuts could follow if exports do not resume, sources said. - Officials have discussed possible sale mechanisms, including auctions, issuance of U.S. licenses to PDVSA's business partners, and whether Venezuelan crude could refill the U.S. Strategic Petroleum Reserve, according to the sources. Summary: Rerouting trapped Venezuelan crude to U.S. refiners could divert supplies that were previously bound for other buyers and would increase flows to U.S. Gulf Coast refineries that can process heavy grades. Talks are ongoing this week and have covered auction mechanisms, licensing and Strategic Petroleum Reserve options. How proceeds for a sanctioned PDVSA would be obtained and handled remains undetermined at this time.