Venezuela’s Dark Fleet of Oil Tankers Emerges

Supertanker Rene, which appeared to be in China at the end of December, re-emerged off the coast of Venezuela over the weekend. (Bloomberg)

The informal fleet of crude tankers that operated under the radar in Nicolas Maduro’s Venezuela is beginning to emerge from the shadows, after the strongman’s capture lifted the veil of how the South American oil producer sought to evade U.S. sanctions. 

The supertanker Marbella, whose location was a mystery for more than a year, turned on its transponder this past weekend to reveal it was sitting off the coast of Venezuela, loaded with 1.9 million barrels of oil, according to ship movements compiled by Bloomberg. The vessel has come in from the cold as part of efforts by the U.S. government and commodity traders Vitol Group and Trafigura Group to move the crude to markets. 

The dark fleet was central to the survival of the Maduro regime, for whom oil was the top source of revenue, funding everything from food and medicine to weapons. The vessels that cloaked their locations, identities and destinations to avoid detection allowed the country to continue pumping crude oil and at one point lift daily output to a multiyear high of 1 million barrels. 

Ghost ships often conceal their location by turning off or spoofing GPS signals to sail under the radar of sanctions. Last year, a fleet of 71 of supertankers — each about the length of three football fields — helped deliver 400,000 barrels a day of Venezuelan crude to refiners in China. That means that nearly six vessels traversed Venezuelan waters incognito every month. 

Among the ships that spoofed signals was the supertanker Rene, regularly used to transport sanctioned oil to Asia. At the end of December, it appeared to be near China but 12 days later its GPS showed it was actually off the Venezuelan coast. Because the China-Venezuela trip can take as long as 50 days, the scenario seems improbable. 

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Hidden vessels began revealing their locations in the days after Maduro’s Jan. 3 capture, when the U.S. moved to assert control over Venezuela’s oil. President Donald Trump is seeking to rebuild the country’s economy through its oil industry, with hopes that companies will invest $100 billion to revive crumbling infrastructure. 

Trafigura and Vitol are helping the U.S. government market as much as 50 million barrels of Venezuelan oil. The trading houses received an initial batch of 4.83 million barrels that was already aboard ghost vessels that is set to be discharged in the Caribbean islands.

The broader shipping market is being shaken up by Washington’s intervention in Venezuela, with freight rates for the route from the Caribbean to the US Gulf surging to the highest level in almost two years. Other routes are also seeing gains, including to Europe and for tankers hauling oil from Mexico. 

Meanwhile, the Marbella, which is hauling crude entrusted to Vitol for sale, is currently on its way to the South Riding Point storage complex in the Bahamas.