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Are China’s Crude Reserves Quietly Dwindling?

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While China’s strategic petroleum reserves…

Venezuela’s PDVSA Looks To Reroute Oil To Europe, Asia Amid U.S. Sanctions

PDVSA

Venezuela’s state oil firm PDVSA is looking to sell more of its oil to customers in Europe and Asia as the U.S. sanctions are cutting off U.S. buyers of its crude, a senior Venezuelan oil official loyal to Nicolas Maduro told Russian news outlet Sputnik in an interview published on Wednesday.

“Yes, we are facing new illegal sanctions from the US. We were exporting about 500,000 bpd to the US. PDVSA will redirect exports to other customers in Europe and Asia,” Ronny Romero, a technical adviser to PDVSA and to Venezuela’s Petroleum Ministry, as well as Venezuela’s National Representative at OPEC, told the news outlet of Russia, which supports Maduro in the Venezuelan political standoff.

U.S. sanctions currently apply to U.S. entities, and “anyway, Russia and China don’t care about US sanctions,” Romero told Sputnik, when asked how PDVSA would convince more European and Asian countries to buy its oil.

Last week, the U.S. imposed sanctions on PDVSA to “help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela. The path to sanctions relief for PdVSA is through the expeditious transfer of control to the Interim President or a subsequent, democratically elected government,” Secretary of the Treasury Steven T. Mnuchin said.

The sanctions block all payments to PDVSA accounts, and buyers of Venezuelan crude are directed to deposit payments in a separate account, to which PDVSA doesn’t have access.

Related: BP Beats Estimates, Posts Highest Profit In Five Years

The sanctions have created uncertainty over payments for crude cargoes contracted before the sanctions were imposed. Reports have it that tankers carrying as much as 7 million barrels of Venezuelan heavy crude are sitting in the Gulf of Mexico awaiting clarity.

Meanwhile, Juan Guaidó, the Venezuelan opposition leader recognized as the country’s interim president by the U.S. and several major European countries, has ordered Venezuela’s congress to appoint new boards at PDVSA and its U.S. refining unit Citgo, Reuters reports.

Guaidó also plans to drop the requirement that PDVSA hold a majority stake in all joint projects, as the leader looks to boost oil production as soon as possible, Guaidó’s envoy to the U.S., Carlos Vecchio, said earlier this week.

By Tsvetana Paraskova for Oilprice.com

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