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Russian Tanker Owner Holds PDVSA Oil Cargo Hostage Over Debts

Sovcomflot

Despite the fact that it managed to make the bond payment due last week, Venezuela’s PDVSA is in a precarious financial position, and regardless of the close Russia-Venezuela ties, a Russian state-run shipping company is now holding a tanker of PDVSA crude in the Caribbean over $30 million worth of unpaid shipping fees.

Russia’s shipper Sovcomflot has sued PDVSA in the Dutch island St. Maarten in the Caribbean and “imposed garnishment on the aforementioned oil cargo,” Reuters reported on Tuesday, citing a St. Maarten court decision.

PDVSA had sent the oil cargo to the Caribbean in October last year, hoping it could net around $20 million from the sale of the crude, but Sovcomflot claims the cash-strapped state-run Venezuelan company owes $30 million in fees.

The oil has been transferred from the tanker to a storage terminal on the island of St. Eustatius near St. Maarten, under the court decision.

The UK Admiralty Court is to decide if the Russian company will take the PDVSA oil.

The Venezuelan company owes not only shipping fees to the Russian company, but also millions of U.S. dollars to terminals around the Caribbean – including the St. Eustatius terminal owned by U.S. company NuStar Energy, Reuters said, citing a PDVSA executive and an employee at one of the terminals. Related: U.S. Oil Assets Could Fall Into Russian Hands If Venezuela Defaults

PDVSA is also months behind on shipping crude oil and fuel to China and Russia under oil-for-loan agreements with its two key political allies. The shipments that PDVSA has failed to deliver to Chinese and Russian state-held companies were worth around $750 million, a Reuters analysis showed back in February.

The latest PDVSA cash shortage for shipping fees has prompted the Russian shipping company to pursue legal action to take what it claims it’s due, despite the long-standing friendly relations between Venezuela and Russia.

Venezuela’s economic crisis is so spiraling out of control that the nation sitting on the world’s largest oil resources has gasoline running low in its capital city, Caracas.

By Tsvetana Paraskova for Oilprice.com

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