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India is resuming imports of crude oil from Venezuela for the first purchases since 2020 as the U.S. lifted most of the sanctions on Venezuela’s oil industry in October.
The easing of the sanctions now allows the production, lifting, sale, and exportation of oil or gas from Venezuela, and the provision of related goods and services, as well as payment of invoices for goods or services related to oil or gas sector operations in Venezuela.
For India, the world’s third-largest crude oil importer, Venezuelan oil is welcome as some refineries are designed to process the South American country’s heavy crude.
“Many of our refineries, including Paradip, (are) capable of using that heavy Venezuelan oil. And we will buy (Venezuelan oil),” Indian Oil Minister Hardeep Singh Puri said at a press conference on Friday, as carried by Reuters.
“If Venezuelan oil comes to market we welcome it,” Puri added, noting that India would buy oil from any country that is not under sanctions.
Some Indian refiners have already started securing crude cargoes from Venezuela since the sanctions were lifted temporarily in October. The biggest refiners, including Reliance Industries, Indian Oil Corporation, and HPCL-Mittal Energy have already moved to procure Venezuelan crude.
Most refiners have resumed the purchases via intermediaries, sources familiar with the development told Reuters earlier this month. Reliance is also looking to discuss direct sales with Venezuela’s state-owned oil firm PDVSA, according to Reuters’ sources.
Reliance, which was a regular buyer of Venezuelan crude before the U.S. slapped the sanctions on Maduro’s regime in 2019, has already booked three tankers scheduled to load oil from Venezuela in December and January, trade sources told the Indian Express early this month.
Indian refiners could pose stiff competition to Chinese independent refiners, which were the biggest customers of Venezuela’s crude before the U.S. sanctions relief. The Chinese ‘teapots’ are reportedly holding back fresh purchases of oil from Venezuela due to unpredictable discounts on cargoes after international majors returned to Venezuelan trades, trading sources in China have told Reuters.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.