RoydadNaft –  Asian buyers are squeezing Venezuelan oil suppliers with steeper discounts than ever, caught in a glut of cheap, sanctioned crude from rivals like Russia and Iran, while U.S. military maneuvers in the Caribbean ratchet up the risks of loading cargo from the South American nation’s ports.

State oil giant PDVSA is slashing prices to sustain export volumes amid slumping global benchmarks, with discounts to Brent crude now roughly double what they were a year ago. The move underscores the mounting pressure on President Nicolás Maduro, whose government leans heavily on oil cash to fund subsidies and stave off unrest after a contested 2024 election.

On Wednesday, President Donald Trump announced U.S. authorities had seized a tanker tied to Venezuelan shipments — the first such direct intervention in the country’s oil trade, based on shipping data and documents reviewed by Reuters. While the U.S. Navy has long targeted drug smugglers in the Caribbean, the Trump administration has signaled it could soon expand operations to onshore targets.

Despite the sanctions squeeze, Venezuela has boosted exports this year beyond 2024 levels, thanks to PDVSA’s scramble to prop up revenues. But low prices have hammered the nation’s heavy crudes hardest, exacerbated by quality issues and Washington’s crackdown.

China, the top destination for Venezuelan barrels, is awash in discounted alternatives, leaving PDVSA with little leverage. “They don’t have much room to bargain,” said one trader involved in deals with Chinese independents. “Shippers are demanding premiums for the extra risk near U.S. warships.”

Recent offers for flagship Merey heavy crude have hovered at just $14 a barrel under Brent — and barely tempted buyers. One cargo for early 2026 delivery fetched a $15 discount, up from $5 to $8 last year, according to multiple traders.

Oil funds the lifeline of Maduro’s regime: social programs and subsidies that blunt economic pain and political blowback from the U.S. This year, China has snapped up 55% to 90% of Venezuela’s exports, versus 40% to 60% in 2024. November shipments hit 746,000 barrels per day (bpd), per tracking data.

PDVSA declined comment. Oil Minister Delcy Rodríguez said last week production climbed to 1.17 million bpd in November, up from 1.13 million the prior month.

Navigating Risky Waters

Exports ticked up 3% to 921,000 bpd last month — the year’s third-highest — fueled by doubled fuel imports to 167,000 bpd. Partner Chevron ramped U.S.-bound crude to 150,000 bpd from October’s 128,000, while supplying diluents for blending extra-heavy grades.

Naphtha imports, including from Russia, have rebuilt stocks depleted by a fire at an upgrader, ensuring steady blended crude flows, documents show.

Crude and fuel exports from Venezuela rose 3% in November to 921,000 bpd, bolstered by increased diluent imports to blend exportable grades after an upgrader fire.

Freight costs are soaring too, as owners tack on “war clauses” to contracts — clauses that let them reroute, cancel voyages or hike fees amid conflict risks. Short hauls to the U.S. or Caribbean feel the pinch less, but Asia-bound trips are getting pricier, forcing PDVSA to deepen discounts further.