Supplies set to offset Brussels embargo on Russian oil, Reuters says
Italian oil company Eni SpA and Spain’s Repsol SA could start shipping Venezuelan oil to Europe as early as next month, Reuters reported on Monday.
Washington believes Caracas will not benefit financially from these cashless transactions and that the money will be used to pay Venezuela’s debt, according to the report.
The United States, which has imposed economic restrictions on the Latin American nation, has given the two companies the green light to resume shipments, Reuters said, hoping crude from the sanctioned nation can help Europe become less dependent on Russia.
The volume of oil Eni and Repsol will receive will not be large, Reuters said citing its sources, meaning the impact on global oil prices will be modest.
Shipments will be permitted provided the oil received “must go to Europe. It cannot be resold elsewhere, said Reuters.
Eni and Repsol, which have joint ventures with Venezuela’s state oil company PDVSA, can count crude shipments against unpaid debts and overdue dividends, according to the agency. The deal would resume oil-for-debt swaps halted two years ago.
Caracas has been under US sanctions for more than 15 years. The latest round of restrictions, imposed in 2019 following allegations of voter fraud, saw all Venezuelan government assets frozen in the United States and all dealings with American citizens and businesses banned.
However, after the start of the Russian military operation in Ukraine in February and subsequent bans on Russian oil in the United States first and a partial embargo in Europe, Washington turned to Venezuela for oil aid and indicated that he could ease the economic pressure on Caracas, in particular by allowing an increase in its oil exports. Before the war in Ukraine, Russia supplied around 30% of the oil consumed in the EU.
For more stories on economics and finance, visit RT’s business section