• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 2 days Even Shell Agrees with Climate Change!
  • 8 days America should go after China but it should be done in a wise way.
  • 4 days How Far Have We Really Gotten With Alternative Energy
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 4 days World could get rid of Putin and Russia but nobody is bold enough
  • 7 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in

Iran And Venezuela Strike Oil Swap Deal

Iran and Venezuela have struck a deal to swap heavy Venezuelan crude for Iranian condensate, Reuters has reported, citing unnamed sources familiar with the deal.

According to these sources, the swaps are set to begin this week and last for six months, although they could be extended. The imports of Iranian superlight crude will help Venezuela revive its falling oil exports amid U.S. sanctions that, among other problems, have cut off the country's access to the light oil that is used to blend with its superheavy to make it exportable.

For Iran, the deal will bring in heavy crude it could sell in Asia, the Reuters sources also said. The diluted Venezuela crude will also likely go to Asian buyers.

Reuters also reported that, according to the U.S. Treasury Department, the deal could constitute a breach of sanctions, to which both Venezuela and Iran are subjects.

"Transactions with NIOC by non-U.S. persons are generally subject to secondary sanctions," the Treasury Department said in response to a Reuters request for comments on the deal. It added that it "retains authority to impose sanctions on any person that is determined to operate in the oil sector of the Venezuelan economy."

Despite the sanction noose, Venezuela has been ramping up its oil exports, generating vital revenue. According to a recent Reuters report, the country, which is home to the world's largest oil reserves, exported more than 700,000 bpd of crude in July—the highest daily export rate since February.

Most of the oil went to China and Malaysia, although the latter is usually only a stop along Venezuelan oil's trip to China. The same report noted that three of the five crude oil blending facilities in the Orinoco Belt were operational, and another crude upgrader was preparing to restart operations after a year's pause.

Iran, meanwhile, recently revealed plans to attract some $145 billion in oil and gas investments from both local and foreign sources.

ADVERTISEMENT

"We plan to invest $145 billion in the development of the upstream and downstream oil industry over the next four to eight years, hence I welcome the presence of domestic and foreign investors in the industry," Javad Owji, Iran's new oil minister, said during a meeting with executives from China's oil giant Sinopec.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • DoRight Deikins on September 27 2021 said:
    I'm a strong advocate for grace and mercy, have great love for the people of Iran (since going to school with some and living there for a time) and all those from Venezuela that I have met, and distress for the suffering that they all are going through at this time. They are all wonderful people, good, good people.

    But can you say paper tiger and Neville Chamberlain? It appears that the US administration believes that they can operate from a position of weakness. I hope they are correct, but historically that leads to war, and I believe it will be a war that the will change the world more than WW2.
  • Mamdouh Salameh on September 27 2021 said:
    This swap deal is mutually beneficial to both Venezuela and Iran. Iran gets paid for diluents supplies to Venezuela in extra-heavy Venezuelan crude oil while Venezuela manages to produce more crude using Iranian diluents.

    The deal is primarily one aimed at helping two friendly countries overcome the atrocious US sanctions.

    Venezuela’s crude oil exports have been on the rise almost approaching 800,000 barrels a day (b/d) and its crude production is heading towards 1.5 million barrels a day (mbd) by the end of the year with three of the five crude oil blending facilities in the Orinoco Belt operational and another crude upgrader preparing to restart soon.

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

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News