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Oil Prices Slide As U.S.-China Tensions Return

Oil Prices Slide As U.S.-China Tensions Return

The recent oil price rally…

The World’s Biggest Oil Trader Negotiates Venezuela Oil Purchase

The largest independent oil trader in the world, Vitol Group, is discussing the purchase of Venezuelan crude oil from a Mexican firm that had received the crude in exchange for aid, Bloomberg reported on Friday, citing emails and documents that it has reviewed.  

Vitol hasn’t traded Venezuelan crude oil since the beginning of last year when the U.S. tightened sanctions against Nicolas Maduro’s regime and essentially banned Venezuelan crude oil exports into the United States.

Since then, the U.S. Administration has further increased the pressure on Maduro and Venezuela’s oil industry by sanctioning last month a Geneva-based trading unit of Rosneft, 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. Washington sanctioned its second Rosneft subsidiary this week.

Vitol is negotiating the purchase of Venezuelan oil from Mexican firm

Libre Abordo, which had received the oil in a barter deal with Venezuela in exchange for aid.

Vitol fully complies with any existing laws and regulations, including sanctions on Venezuela, the oil trading giant told Bloomberg, noting that “Vitol would only consider receiving product of Venezuelan origin if it had the relevant assurances that it could do so lawfully.”

Last week, Reuters reported that privately owned Libre Abordo had received so far 6.2 million barrels of Venezuelan crude to resell on international markets and has another two cargoes of crude oil and fuel, to be loaded this month. The Mexican company received the barrels of crude from Venezuela’s state oil firm PdVSA in exchange for corn and water, according to documents Reuters has seen.

The contract between the Mexican firm and Caracas was signed last year, Libre Abordo told Reuters, and was still in effect. Since there were no cash payments involved in the relationship, there was no danger of violating U.S. sanctions against Venezuela.  

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on March 14 2020 said:
    Despite intrusive US sanctions against Venezuela, Venezuelan crude oil is being sold around the world either by Russia’s oil giant, Rosneft, or by barter trade or direct to customers like China, India and Turkey. Moreover, buyers of Venezuelan crude oil could bypass US sanctions completely by using China's petro-yuan for payment.

    A week ago, a Mexican company, Libre Abordo, bought 6.2 million barrels of crude oil from Venezuela in barter trade in exchange for corn and water.

    Now the largest independent oil trader in the world, Vitol Group, is negotiating with the Mexican company to purchase the Venezuelan crude oil it bought recently.

    And despite almost two years of sanctions against Venezuela, the United States has failed miserably to effect a regime change. Moreover, Venezuela’s oil industry is still ticking with support from Russia and China and also from foreign oil companies who were recently been given the responsibility of running their oil joint projects with PDVSA on their own including US oil giant Chevron.

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

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