Venezuela’s dwindling oil exports were dealt another blow as one of India’s top refiners secured millions of barrels of Canadian crude on concern that the U.S. is poised to step up sanctions against Caracas.
Reliance Industries Ltd, owner of the world’s largest refining complex, signed a deal to purchase 2 million barrels of heavy Canadian oil a month for the next six months, according to people familiar with the situation, who spoke on condition of anonymity. Venezuela has been the third-largest supplier of crude to Reliance so far this year, according to data compiled by Bloomberg.
While U.S. sanctions have all but crippled Venezuela’s oil export trade, so-called crude-for-diesel swaps between national oil company Petroleos de Venezuela SA and Asian and European refiners were permitted for humanitarian reasons. The Trump administration was reported last month to be considering additional measures to cut off these remaining fuel transactions. Reliance’s decision to buy Canadian crude in these volumes may be a sign that it doesn’t expect the status quo to last much longer.
The Trump administration is zeroing in on the diesel swaps because it’s running out of options to pressure the regime of President Nicolas Maduro, according to Scott Modell, managing director of Rapidan Energy Group. “The White House would like to galvanize the Venezuelan street and undermine the legislative elections on December 6,” he said.
(Bloomberg News)
