Why in news?

Indian companies are importing significant volumes of petroleum coke from Venezuela for the first time, as the OPEC nation boosts exports not specifically targeted by U.S. sanctions.

Highlights:

• India’s growing appetite for Venezuela’s petcoke – a byproduct from oil upgrading and an alternative to coal – is being driven by a scramble for inexpensive fuel to power industries as global coal prices have surged.
• This could boost cash flow for the South American producer, where state and private companies have increased exports of petrochemicals and oil byproducts, and the more competitively-priced Venezuelan supplies could displace cargoes from traditional suppliers.
• Indian cement companies imported at least four cargoes carrying 160,000 tonnes of petroleum coke from April to July, according to three trade sources, Refinitiv shiptracking data and Venezuelan shipping schedules.
• Another 50,000-tonne cargo is expected to reach the port of Mangalore on India’s south western coast in the coming days while a 30,000-tonne shipment is scheduled to depart later in August.
• India, which counts the United States and Saudi Arabia as major petcoke suppliers, received its first ever cargo from Venezuela in the beginning of 2022.

Why this move?

• A surge in global coal prices to record highs since the Russia-Ukraine war has pushed Indian cement makers including JSW Cement, Ramco Cements Ltd. and Orient Cement Ltd. to import petcoke from Venezuela.
• “The quality of petcoke is very good and it has very low sulphur,” and additionally the cargoes take nearly 50 days to arrive in India.

SUPPLIERS

• The petcoke cargoes were shipped in April-July by Shimsupa GmBH, a Germany-headquartered scrap trading firm, which has an exclusive arrangement with Switzerland-based Maroil Trading to supply Venezuelan petcoke to India, China, Pakistan and Turkey.
• Venezuela’s oil sector has been under U.S. sanctions since 2019. Washington imposed sanctions on the country’s most important global business as the former Trump administration ratcheted up its bid to force socialist president Nicolas Maduro out of power.Higher Venezuelan supplies have weighed on global prices this year, according to petcoke traders in Houston.

About petcoke

• A tonne of petcoke is more expensive than coal, but produces more energy when burnt. It is generally not used as fuel because of toxic emissions, but is widely used by the cement industry – its largest consumer, as sulphur dioxide emissions are absorbed by limestone.