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Oil workers are seen at a PDVSA oil site in Barcelona, Venezuela, May 1, 2007.

United States imports of Venezuelan oil and oil products fell by 11.7 per cent to a five-year low in the first four months of the year, the US government said this week, while Venezuela boosted oil shipments to its budding ally, China, instead.

The US imported an average 1.13 million barrels of crude and petroleum products a day from Venezuela in the first four months of 2008, from about 1.28 million barrels a day in the same period last year, US Energy Information Administration (EIA) figures show.

The last time US imports were that low, a strike had paralysed Venezuela's oil industry in 2002-2003.

Seeking new markets

The decline comes as US crude imports are falling across the board, and amid efforts by Venezuelan state oil company Petroleos de Venezuela SA, or PDVSA, to cut its reliance on the US by seeking new markets in China and India, energy analysts said.

Yet PDVSA's output may also be stagnating.

The company says it produces an average 3.2 million barrels a day, but the Paris-based International Energy Administration put production at about 2.4 million barrels a day in the first four months of the year - slightly less than the same period last year.

High prices are meanwhile slowing demand for gasolene and fuel imports in the US, said Leo Drollas, chief economist at the Center for Global Energy Studies in London.

US imports decline

United States imports of Venezuelan crude oil fell 7.4 per cent to an average 990,000 barrels per day in the first four months of the year, while imports of Venezuelan petroleum products fell 32.7 per cent to an average 144,000 barrels per day, the EIA said.

Last year, PDVSA sent nearly 60 per cent of its total exports to the US, up three per cent over a year earlier.

Its total exports meanwhile fell by 6.2 per cent.

President Hugo Chavez has repeatedly stressed Venezuela's need to slash that reliance and diversify its oil market, warning that the US "empire" is planning to invade Venezuela and threatening to suspend exports.

PDVSA has accordingly boosted oil shipments to China, sending 250,000 barrels of oil to the Asian giant each day as of April, and aiming to reach 500,000 barrels a day by 2010.

The company has also formed joint ventures with Chinese, Iranian, and Brazilian oil companies, and provides subsidised fuel to Latin American allies including Cuba and Nicaragua.

Refined product demand

Venezuela is exploring investments in oil refineries in Brazil, Nicaragua, Ecuador and other countries. Demand for refined products is soaring in Venezuela, where car sales are booming and gasolene costs 12 US cents a gallon (three cents a litre), among the cheapest in the world.

Some suggest Venezuela's limited refining capacity will keep it dependent on the US, where roughly a third of PDVSA's extra-heavy crude was refined in 2007.

"Venezuela, for better or worse, remains dependent on the US as its primary natural market," said Patrick Esteruelas, a New York-based Latin America analyst for the Eurasia Group.

- AP

SOURCE: Financial Gleaner, Friday, July 4, 2008