President Donald Trump has portrayed his takeover of Venezuela\u2019s oil sales as a victory for America, but when his administration wanted to sell several billion dollars\u2019 worth of the fuel quickly, the experts it turned to were a couple of foreign trading houses.<\/p>\n
Vitol Group and Trafigura Group\u2019s special licenses to ship still-sanctioned Venezuelan barrels have given them a head start in a potentially lucrative trade, while Caracas is under pressure to get the oil flowing again after Trump\u2019s blockade forced the industry to cut production levels as storage filled up.<\/p>\n
For Vitol and Trafigura, it\u2019s also a chance to claw back business in key markets. US restrictions on oil from Venezuela, Russia and Iran have squeezed Western commodity merchants out of a growing chunk of the global oil trade in recent years, much of which has flowed at heavy discounts to buyers in Asia.<\/p>\n
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\u201cIt\u2019s a big prize for the commodity traders and a lot more immediate than for any of the global oil companies,\u201d said Christian Frutig, a former Trafigura and Standard Chartered Plc commodities executive. \u201cIt\u2019s an opportunity to get back into a business that was previously off limits.\u201d<\/p>\n
Taking delivery of and finding buyers for tens of millions of barrels of sanctioned oil, including a significant share stored on dark-fleet tankers off the coast of Venezuela, is a huge and complex task. The Trump administration turned to Vitol and Trafigura because they were seen as the companies that would be able to move the initial barrels most quickly, according to an official.<\/p>\n
The traders have been moving to deliver the large volumes of oil into storage in the Caribbean, but the crucial question is how quickly they can find buyers for it \u2014 and at what price?<\/p>\n
Bloomberg reported last week that two tankers were scheduled to sail from Venezuela toward Europe, some of the first such shipments in almost a year, including one that would deliver barrels to Repsol SA\u2019s oil refinery in Cartagena, Spain.<\/p>\n
Read More:\u00a0Traders Haul 12 Million Barrels of Trump\u2019s Venezuelan Oil\u00a0<\/a><\/p>\n The companies have also been offering cargoes to US Gulf Coast refiners at discounts to the Brent benchmark of about $8 to $9 a barrel, one person said, and Reuters reported last week that Vitol had sold cargoes to both Valero Energy Corp. and Phillips 66 at similar levels.<\/p>\n Given that the traders are buying crude from Venezuela\u2019s state oil company Petr\u00f3leos de Venezuela SA at Brent minus about $15 a barrel, that suggests a potential for hefty profits, in an industry in which trading margins are typically measured in cents rather than dollars per barrel.<\/p>\n Still, the devil will be in the detail: many of the early cargoes have been moved straight into storage, where the traders will be responsible for financing the oil until they can sell it. That\u2019s expensive because banks are largely unwilling to touch the trade, meaning the traders are financing it with their own cash, a person familiar with the matter said.<\/p>\n What\u2019s more, the oil market is in backwardation, with futures trading below spot prices, which makes financing oil in storage more expensive. If they can sell it, the traders\u2019 margins are also likely to be eaten into by shipping costs, which have soared since the start of January.<\/p>\n And the clock is ticking \u2014 the US plans to\u00a0allow more<\/a>\u00a0companies to deal in Venezuelan crude, something that would help ease port and storage-tank congestion, but would mean greater competition for both barrels and buyers. Future sales will be open to other traders and refiners, including sales directly to American refiners, the US official said.<\/p>\n \u2018Get What You Want\u2019<\/p>\n Vitol and Trafigura are two of the largest commodity trading houses: a secretive group of largely privately owned companies responsible for buying, selling and transporting natural resources to where they are needed across the globe.<\/p>\n Their sprawling network of dealmakers, contacts and logistics experts mean the traders have time and again been poised to step in and profit during times of geopolitical and economic upheaval. Most recently, the industry reaped massive profits during the energy crisis that followed Russia\u2019s invasion of Ukraine in 2022 \u2014 a year in which Vitol\u2019s sales of $505 billion made it one of the biggest companies in the world by revenue.<\/p>\n Together, the two companies handle roughly enough oil every day to supply the needs of Japan, Germany, India and Mexico combined.<\/p>\n And so earlier this month, when Trump\u00a0summoned<\/a>\u00a0the world\u2019s top oil CEOs to squirm under his questioning about their investment plans for Venezuela at a televised White House meeting, executives from Vitol and Trafigura came prepared with more than just promises. It turned out they were already arranging for ships to pick up and export the country\u2019s crude.<\/p>\n \u201cOur first vessel should load in the next week,\u201d Trafigura\u2019s Chief Executive Officer Richard Holtum told the president.<\/p>\n John Addison, a senior Vitol trader and major Trump donor went even further: \u201cWe\u2019re here to ensure that you\u2019re going to be able to move all of this oil all around the world at the best price possible so that the influence that you have over the Venezuelans will ensure that you get what you want.\u201d<\/p>\n Vitol and Trafigura\u2019s opportunity in Venezuela comes just a handful of years after both were investigated and in some cases pled guilty to US charges of bribing national oil executives to secure contracts in South America.<\/p>\n That history has come up last week as US Senate Democrats called for greater transparency over the arrangements behind the Venezuelan oil trade.<\/p>\n \u201cGiven the urgency of the matter and the enormous risk of profiteering and corruption, the Administration has a heightened obligation, beyond existing financial disclosure requirements,\u201d the senators\u00a0said<\/a>.<\/p>\n Representatives for Vitol and Trafigura declined to comment.<\/p>\n The two trading houses have been granted contracts with PDVSA to help sell between 30 million and 50 million barrels of Venezuelan oil relinquished to the US following the\u00a0shock capture<\/a>\u00a0of former Venezuelan leader Nicolas Maduro in early January.<\/p>\n Picking Up<\/p>\n