India’s Reliance is set to resume oil imports from sanctioned Venezuela, according to a Reliance representative that spoke to Reuters on Wednesday.
India had stopped its imports of Venezuelan oil months ago after the United States sanctioned Venezuela. Reliance feels secure in its decision to resume the imports, because it will be taking the crude oil in exchange for supplying Venezuela with fuels including diesel, a scenario that is allowed under the sanctions.
“These are actions compliant to U.S. sanctions as crude sourcing against supply of permitted products is allowed,” the representative said in an email to Reuters.
Venezuela’s oil industry has suffered under the weight of those sanctions that have caused inventories to build up, causing its last running blending unit, Petrosinovensa, to shut late last week. Other blending units had already been shuttered earlier in the year.
Venezuela’s list of crude oil buyers have shrunk in the wake of the sanctions, with Cuba, Russia, and China one of its last remaining customers, but few of those customers pay in cash for all the Venezuelan oil they receive.
Like Reliance’s plan to swap its oil products for crude oil, Cuba swaps goods and services for its oil, while China and Russia both accept crude oil from Venezuela in exchange for loans they already extended to the troubled Latin America country. Of those, Russia’s Rosneft is Venezuela’s largest importer, handling 66% of all of Venezuela’s imports.
For India, the resumption of Venezuelan crude oil imports will come as welcome relief, after it had to stop crude oil imports from Iran due to sanctions as well.
India’s Nayara Energy Ltd said last month that 3.5 million barrels a day of ultra-heavy crude have been taken out of the market due to the sanctions on Iran and Venezuela.