All indications are that if…
Europe anticipates a significant increase…
Venezuela may re-route crude oil that was initially bound for the United States to Russia and other countries, Manuel Quevedo, Venezuela’s Oil Minister and head of the state oil firm PDVSA, said on Monday.
Venezuela, under U.S. sanctions on its oil industry since the end of January, will decide where its own crude oil will go, and one of its key goals is to boost ties with Russia, Reuters quoted Quevedo as saying on the sidelines of an OPEC+ panel in Baku, Azerbaijan, today.
Russia is the staunchest supporter and ally of Nicolas Maduro’s regime in the political power struggle in the Latin American country sitting on top of the world’s largest oil reserves, while the U.S. and many European nations have recognized Venezuelan opposition leader Juan Guaidó as the legitimate interim president. Russia has stood by Maduro for years and has poured billions of U.S. dollars in Venezuela in the form of loans and oil investments.
In another sign of the closer Maduro-Russia ties, Quevedo said in Baku this weekend that he would visit Moscow in early April to open the PDVSA office that Maduro had ordered moved from Lisbon to the Russian capital earlier this month.
Venezuela’s key oil export terminal Jose is now back in operation, Quevedo also said at the meeting in Baku.
Earlier this month, a massive power outage in Venezuela shut down oil production and processing operations as well as the main oil export terminal.
Meanwhile, more than 6 million barrels of Venezuelan crude oil on 11 tankers, initially bound for the U.S., are sitting stranded in the Atlantic due to the U.S. sanctions, Reuters reported last week. PDVSA is now asking for prepayment for oil shipments, but the U.S. firms are not allowed to pay PDVSA because of the sanctions; instead they are directed to deposit the payments in escrow accounts to which the Venezuelan opposition, not Maduro’s regime, has access.
This situation has resulted in U.S. refiners Valero Energy and Citgo, the U.S. unit of PDVSA, proposing to return crude oil loaded before the sanctions were imposed, while Chevron has unsuccessfully tried to legally pay for oil it had contracted to buy, Reuters reported, citing an internal document of the Venezuelan state oil firm it had seen.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.