A pipeline explosion at a natural gas complex operated by Petroleos de Venezuela (PdVSA) in the country’s Eastern Monagas state has left at least three people injured, Reuters has reported.
The explosion comes just a month after more than 20 people were left with burns after a large fire at a crude storage tank in the country’s Western region, highlighting the vulnerabilities of the country’s crumbling energy infrastructure after years of sanctions.
Two weeks ago, Reuters reported that PdVSA and its joint ventures exported an average of 947,387 bpd of crude and fuel in October, 21% over the previous month and the highest monthly figure since early 2020.
The large production increase came despite new sanctions announced by the Biden administration. Back in July, the United States Office of Foreign Assets Control (OFAC) eased some sanctions on Venezuela but retained sanctions on PdVSA.
OFAC issued a new license allowing certain transactions related to the export or re-export of liquefied petroleum gas (LPG) to Venezuela until July 8, 2025. However, transactions with the state-owned oil and natural gas company in which PdVSA has a 50 percent or greater interest, remain prohibited under the sanctions imposed by various executive orders.
Trump is expected to be tougher on Venezuela and Iran. Iran’s oil exports have seen a strong rebound under the Biden administration with the U.S. and its allies hoping to strike a new nuclear deal with Tehran after the Trump administration scuttled the Joint Comprehensive Plan of Action (JCPOA) deal of 2015.
Under former President Donald Trump, Iranian oil production tumbled from 3.8 million barrels per day in early 2018 to less than 2 mb/d in late 2020; in contrast, production has surged under Biden to 3.2 mb/d.
However, commodity experts at Standard Chartered have predicted that actions by OPEC+ are more likely to determine the near-and mid-term oil price trajectory. StanChart says the latest announcement by OPEC strengthens the case that the pace of tapering will be market-dependent and not automatic as traders fear. This realization is likely to have driven the latest oil price rally.
By Alex Kimani for Oilprice.com