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Venezuela is reportedly looking for oil tankers in anticipation of sanction relief from Washington.
Reuters cited three unnamed sources and a document as saying the state-owned oil company PDVSA was in talks to buy several oil tankers after Washington earlier this month sent a high-level delegation to Caracas to discuss potential sanction relief.
According to the sources, officials from the maritime arm of PDVSA had met with several tanker owners who had expressed their readiness to receive Venezuelan oil or oil products as payment for their vessels.
"PDVSA's tanker fleet is too short for any increases in oil production for domestic refining or exports," one of the Reuters sources said.
After the U.S. visit to Caracas earlier this month, there were reports that the Washington officials had asked Venezuela to commit certain volumes of crude for U.S. refineries in exchange for sanction relief. The talks in Caracas themselves ended without an agreement of any sort.
Venezuela produces heavy crude, which is a necessary part of the oil mix at U.S. refineries. With the ban on Russian oil and fuel imports, the U.S. has remained reliant on only Canadian heavy crude. Canada is only too happy to supply it, but perhaps it cannot do so fast enough.
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The United States broke off diplomatic relations with Venezuela in 2019 after national elections that cemented Nicolas Maduro as president. Sanctions followed, targeting specifically Venezuela's oil industry.
However, Washington could not completely stop Venezuelan oil exports despite deepening sanctions, with China and Russia coming to the rescue. Venezuela continues to export most of its oil to China.
For Caracas, bans and self-sanctioning on Russian oil could be the opportunity of a regime's lifetime. With few large producers of heavy crude, its oil could become a lot more essential than before, as demonstrated by the U.S. visit.
However, the chances are that the White House will be cautious in the promises it makes, lest it draws criticism for going back on punitive measures aimed at teaching Caracas a lesson in democracy. Although it could be argued that the lesson has failed to produce any results, a 180-degree turn is likely to be met with opposition within the U.S.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.