India imported in June the highest volume of Venezuelan crude in 21 months, more than double the amount from May and more than 50 percent higher than in June 2018, Reuters reported on Monday, citing data provided by industry and shipping sources.
The surge in India's imports of Venezuelan crude oil to 475,200 bpd in June was partially due to delayed cargoes from previous months, according to Reuters' shipping sources.
India, which stopped buying Iranian oil in May after the U.S. removed all sanction waivers for Iran's oil customers, continues to buy Venezuelan oil, despite earlier U.S. assurances that private Indian refiners had stopped buying oil from Venezuela.
According to Reuters, there are two private refiners who continue to buy Venezuelan oil-Reliance Industries and Nayara Energy, who had struck term deals to buy crude from Venezuela's state oil firm PDVSA before the U.S. slapped sanctions on Venezuelan oil earlier this year.
Nayara Energy, formerly known as Essar Oil before Russia's oil giant Rosneft bought a significant stake in the Indian refiner, also receives Venezuelan oil from Rosneft, which PDVSA sends to the Russians in exchange for repaying debt.
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Reliance, for its part, has a 15-year term deal with the Venezuelan oil company from 2012 to buy up to 400,000 bpd of heavy crude oil.
The imports of Venezuelan oil through Russia's Rosneft and the delayed cargoes from previous months resulted in Indian imports of Venezuelan crude soaring 54 percent in June 2019 versus June 2018. Indian imports of Venezuelan crude oil increased by 11 percent in the first half this year, to around 357,000 bpd, according to the data provided to Reuters.
Despite the economic collapse and political impasse, Venezuela lifted its crude oil and refined oil products exports in June by 26 percent from May, mostly thanks to higher shipments under oil-for-loan deals with China. India was the second-largest single oil buyer of Venezuelan oil, according to Reuters data compiled from Refinitiv Eikon and PDVSA company records. Venezuela exported 1.1 million bpd of crude oil and refined oil products last month, and India accounted for 18 percent of those, behind the undisputed top destination, China, which took in 59 percent of Venezuelan oil exports.
By Tsvetana Paraskova for Oilprice.com
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Comments
Moreover, India has to look after its own interests particularly when having to pay a hefty bill for importing 4.54 million barrels a day (mbd) in 2018 projected to rise to 4.8 mbd this year. That is why importing large volumes of oil from Venezuela comes as no surprise.
And despite a claim by the author of this article that India stopped buying Iranian crude in May for which no proof was provided, Indian imports of Iranian crude oil have continued with increasing volumes.
By continuing its imports of Venezuelan and Iranian crude oil, India is not only ignoring US sanctions against the two countries but is also asserting that it will never kowtow to the United States where its national interests are concerned.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London