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Two Indian oil refiners who still buy Venezuelan crude will stop importing oil from the Latin American country from April as the U.S. steps up sanctions pressure on Nicolas Maduro’s regime, Reuters reported on Friday, quoting three sources familiar with the plans.
Indian conglomerate Reliance Industries as well as Nayara Energy, in which Rosneft holds a stake, have been buying a lot of Venezuelan crude in recent months, via a trading unit of Russian oil giant Rosneft.
According to company and industry data and sources cited by Reuters, India was the top destination of Venezuela’s oil in January 2020, taking 38.5 percent of the Latin American country’s oil exports.
The U.S., however, slapped sanctions on Rosnef’s Geneva-based trading unit, saying that the company Rosneft Trading has been helping Maduro’s regime to evade sanctions and to continue selling oil to keep the regime alive.
Reliance Industries and Nayara Energy, both of which have financial exposure to the U.S. banking and financial systems, have vowed full compliance with the sanctions, to avoid running afoul of the U.S. Administration and become targets of secondary sanctions themselves.
Reliance hasn’t ordered any Venezuelan cargoes for April, while Nayara Energy will stop processing Venezuelan crude after getting its contracted volumes in March, Reuters’ sources said.
Firms have until May 20 to wind down business with the Rosneft trading unit, and India looks intent to comply with all sanctions guidance.
Cutting off Venezuelan exports to what was its biggest market in January would further complicate Maduro’s oil exporting business.
The U.S. Administration is now looking to further increase the pressure on Venezuela’s oil industry and exports.
“The President has made a decision to push harder on the Venezuelan oil sector and we’re going to do it. And what we’re telling people involved in this sector is that they should get out of it,” Elliott Abrams, U.S. Special Representative for Venezuela, told Reuters in an interview on Monday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.