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Venezuela finds new ways for oil flows

International 15 Jan, 2020 Follow News

Venezuela finds new ways for oil flows

Venezuela, its oil exports decimated by United States sanctions, is testing a new method of getting its crude to market by allocating cargoes to joint-venture partners including Chevron Corp, which in turn market the oil to customers in Asia and Africa.

This would not violate sanctions if sale proceeds are used for paying off a venture's debts. This approach could help Venezuela overcome obstacles to producing and exporting oil.

Venezuela's oil exports fell 32 percent last year as the US government blocked imports by American companies and transactions made in US dollars. PDVSA, the state-owned oil and gas company, was forced to use intermediaries for crude sales as Washington pressured Venezuela's Indian and Chinese customers to halt direct purchases.

The sanctions were designed to oust Venezuelan President Nicolas Maduro after most Western nations branded his 2018 re-election a sham.

By acting as an intermediary for PDVSA's oil sales, Russia's Rosneft in 2019 became the largest receiver of Venezuelan crude, using the sales to repay billions of dollars in loans granted to Venezuela in the past decade.

Washington has mostly allowed mechanisms to pay off debt with oil or to swap Venezuelan crude for imported fuel, but Venezuela's opposition is lobbying the US administration to punish intermediaries.

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