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Market Chatter: Traders Press for Discounts on Venezuelan Oil Amid Soaring Shipping Costs

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Commodities trading firms Vitol and Trafigura Group are pushing for steeper discounts on Venezuelan crude oil, arguing that surging maritime freight rates are eroding their profit margins, Reuters reported on Tuesday, citing industry sources.

Vitol and Trafigura are currently bidding $18 to $20 per barrel below Brent benchmarks for cargoes destined for the US or Europe. The traders contend that wider discounts are needed to absorb rising shipping costs, putting renewed financial pressure on state energy firm PDVSA and its joint-venture partners.

The formula price for Venezuela's flagship Merey crude, representing the maximum theoretical value under optimal market conditions, rose to $76.82/bbl in August, up from $67.36 in July. That pricing remains about $14 below Brent.

The two firms have emerged as dominant players in Venezuela's energy sector following the ouster of former President Nicolas Maduro. PDVSA and Trafigura did not immediately respond to' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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$META