Polish refiner Orlen has scrapped contracts to purchase Venezuelan crude and oil products after losing millions of U.S. dollars on prepayment for cargoes that haven't been loaded while a wind-down period of the return of the U.S. sanctions on Venezuela has begun, a manager at Orlen has told Reuters.
Refiners and traders flocked back to trade with Venezuela at the end of last year after the United States lifted most sanctions on Venezuela's oil industry after the Nicolas Maduro government reached a deal with the opposition over elections to be held this year.
In October 2023, the U.S. issued a six-month general license temporarily authorizing transactions involving the oil and gas sector in Venezuela. The license authorized 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.
But the U.S. Department of the Treasury had warned that sanctions would snap back in place if Maduro doesn't allow fair elections.
Last week, the U.S. reimposed the oil sanctions on Venezuela after finding that Maduro and his representatives had not fully met the commitments ahead of the elections. The U.S. thus allowed the general license authorizing transactions in Venezuelan oil to expire at 12:01 AM on April 18 but issued a 45-day wind-down license.
Poland's Orlen has been waiting for months for cargoes to be loaded. But after losing $400 million on prepayments for deliveries it never received and in view of the returning sanctions, the Polish refiner canceled the contracts, the company manager told Reuters.
The loading of six tankers, including three supertankers capable of carrying 2 million barrels of oil, was initially scheduled for December and January. But this was not completed in March, the source said.
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. More