• PDVSA is selling Merey crude at a discount of around $21 per barrel below Brent, up from $14–$15 below Brent last week, according to trading sources.
  • Customers are pushing for contract changes and reimbursements amid heightened sanctions enforcement and seizure risks.
  • The widening gap reflects growing pressure on Venezuela's oil revenue as intermediaries cut resale prices to offset legal and logistical challenges.

Venezuela’s state oil company PDVSA is facing steeper discounts on its main export blend, Merey heavy crude, with the price gap to Brent widening sharply to approximately $21 per barrel, up from $14–$15 below Brent just a week earlier. According to people familiar with the matter, this shift comes as some customers seek to amend contract terms and secure compensation in response to rising sanctions and enforcement risks that have disrupted oil flows.

Efforts to maintain export volumes have hit a snag after recent U.S.-led actions, including at least one seizure or interdiction of Venezuelan crude, which sources say has forced intermediaries like Chevron (CVX) and traders to slash resale prices. Without more favorable terms, these players risk absorbing significant losses from legal and logistical hurdles. "The risk premium has spiked," one trader noted, speaking on condition of anonymity due to the sensitivity of the matter. "Everyone is re-evaluating their exposure."

PDVSA, historically a major global exporter, has been navigating a complex web of sanctions for years, but the latest enforcement push appears to be tightening the screws. In November, Venezuela’s crude exports averaged about 784,000 barrels per day, slightly above the 2025 average, with total liquid exports near 967,000 bpd. China remains the primary buyer, taking roughly 613,000 bpd, often through intermediaries or schemes to obscure the oil’s origin. However, the deepening discount means less net revenue per barrel for Caracas, squeezing an economy already reliant on oil for hard currency.

Industry-specific elements are compounding the pressure. PDVSA’s operations depend heavily on imported diluents, notably Russian naphtha, to blend extra-heavy crude for export, adding another layer of complexity amid sanctions. A 25% U.S. tariff on countries importing Venezuelan crude, announced in 2025, further discourages buyers and depresses effective prices. Attempts to reach PDVSA for comment were unsuccessful, but sources indicate the company may have to accept more onerous terms, such as pre-payment or shorter contracts, to keep barrels moving.

The situation mirrors dynamics seen with other sanctioned crudes, like Russian Urals and Iranian grades, where discounts have become entrenched due to legal risks and opaque shipping practices. For now, Merey is likely to trade at a wide discount as enforcement actions persist, with analysts noting that while volumes have held up, the margins are increasingly captured by intermediaries rather than PDVSA. In the short term, this could mean continued volatility for Venezuela’s oil revenue, even as the regime adapts to a high-risk, low-price model.