July 2, 2020 / 4:21 PM / a month ago

U.S. auction of fuel allegedly destined for Venezuela receives no bids

(Reuters) - A U.S. court auction of 100,000 barrels of gasoline that a shipping company suspected was destined for fuel-starved Venezuela received no bids, according to a late Wednesday filing, raising doubts about the fate of the cargo.

Marshall Islands-based Brujo Finance Company feared the South American country was the true destination of an April fuel delivery to Aruba it was hired to conduct on behalf of Wilmer Ruperti, a Venezuelan shipping magnate who is close to the socialist government in Caracas, which is under U.S. sanctions.

The U.S. District Court for the Southern District of Texas conducted the auction on Wednesday to raise funds for the damages sought by Brujo for the fees its vessel, the Alkimos, had incurred while waiting. The vessel is anchored off the U.S. Gulf Coast, Refinitiv Eikon data showed.

Five bidders participated in the auction, but none of them were willing to place an offer at the minimum bid level of $2.5 million for the cargo, according to the filing. That comes out to less than half the gasoline futures benchmark on the New York Mercantile exchange RBc1.

Among the companies that registered but did not place a bid was global commodities trader Trafigura, according to a person familiar with the matter. Trafigura declined to comment.

The next steps in the case were unclear.

Euroshipping previously accused Brujo of “theft” for refusing to deliver the cargo, and said the shipment did not run a risk of violating U.S. sanctions.

Venezuelan President Nicolas Maduro’s government blames U.S. sanctions for the once-prosperous OPEC nation’s chronic fuel shortages. Washington is seeking to oust Maduro, who stands accused of rigging his 2018 re-election.

Maduro’s critics argue the shortages result from years of underinvestment and lack of maintenance at the country’s 1.3 million barrel-per-day refining network, which is mostly halted.

Reporting by Luc Cohen in New York; Editing by Bernadette Baum and Richard Chang

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