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Defying Sanctions, India Will Resume Oil Imports From Venezuela

PDVSA tanker

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 Eneregy 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.

By Julianne Geiger for Oilprice.com

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  • Mamdouh Salameh on October 10 2019 said:
    With India it is better to watch what it does rather than what it says. India has been and still a major buyer of Venezuelan crude oil. It never stopped importing crude from Venezuela and has been defying US sanctions on Venezuela since the US imposed them. India has been buying up to 400,000 barrels a day (b/d) of Venezuelan crude in barter trade.

    A sign that the global influence of the indispensable superpower is eroding fast is that virtually most countries of the world have been defying US sanctions in principle and those on Iran and Venezuela in particular. That is why US sanctions on Iran and Venezuela have so far failed miserably.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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