According to documents and data from the company, Venezuela's PDVSA, the state-owned oil company, has started to fill tankers with crude oil and fuel oil, and keep them in Venezuelan water, due to the accumulation of inventories caused by?the U.S. seizing Venezuelan-linked ships on sea.

The U.S. Coast Guard intercepted the Skipper and Centuries in the Caribbean Sea this month. Both were fully loaded with Venezuelan crude. This week, the Coast Guard pursued a third vessel approaching OPEC's shore. The Coast Guard targeted vessels from a "shadow fleet" that carried sanctioned oil. Donald Trump, the president of the United States, has announced that all vessels under U.S. sanction will be blocked. This has scared ship owners, and more than a dozen containers are still stuck in Venezuelan water waiting to leave.

Documents show that the growing backlog is causing the company to fill its onshore tanks quickly, particularly at the Jose terminal which receives heavy oil in excess from the main region of production, the Orinoco Belt.

Shipping and company data revealed that PDVSA started draining part from those inventories into oil tankers last weekend. This is a strategy they have used in the past to avoid reducing oil production.

Documents show that because PDVSA and its main joint venture partner Chevron have not suspended the export of crude grades produced jointly, Venezuela's west region, which has limited storage capacity, is close to normal. Chevron is only responsible for about a quarter (or 130,000 bpd) of crude grades produced by blending stations and upgraders in the Orinoco belt. PDVSA exports three quarters of the crude to China. This is where about 80% Venezuelan crude exports have gone this year.

According to trade intelligence firm Kpler, PDVSA’s onshore oil stock at Jose has decreased from 14 million barrels per month earlier this year to between 9 and 11 million barrels in September.

Kpler said that the total oil stock in the country has reached 22 million barrels - the highest level since August - so far this year.

PUSHING ?BACK AND FORWARD

Sources at PDVSA said that the company had been trying to convince customers to keep receiving oil cargoes bound towards China in the Jose port until last week. However, it is becoming more difficult now after the U.S. attacked two additional vessels over the weekend. The company has been forced to build floating storage as it negotiates with customers to change contracts and to offer discounts. Other customers are pushing to return their cargoes back to the terminals.

Sources claim that top officials of PDVSA considered but declined to declare force majore on some crude exports last week in order to negotiate with customers individually. Force majeure is when a seller releases itself from contractual obligations due to reasons beyond its control.

Venezuelan President Nicolas Maduro announced on Monday that oil cargo deliveries to Chevron for export will continue, despite a dispute with Washington which has increased pressure to force him out of power. "Under rain, thunder or lightning and regardless of any conflict, the contract with Chevron will be met." In a televised address, he stated that "we are serious and decent people."

Chevron has said repeatedly that its operations in Venezuela are "continuing without disruption" and in full compliance of the laws and regulations applicable. On Tuesday, Venezuela's ruling-party-controlled National Assembly approved a law that introduces prison sentences of up to 20 years for anyone who promotes or finances what it describes as piracy or blockades of oil cargoes. Reporting by Marianna Paraga, Arathy Sommesekhar, and Staff in Houston; Editing by Nathan Crooks Alistair Bell, David Gregorio

(source: Reuters)