Venezuela could circumvent US sanctions with “Rosneft”

Venezuelan state oil concern Petróleos de Venezuela SA (PDVSA) may be using the Russian state oil company “Rosneft” to bypass US sanctions.

According to them, PDVSA transfers its invoices from the sale of oil to “Rosneft”. The payment period in such transactions is from 30 to 90 days, but the Russian company transfers the money immediately. “Rosneft” pays for Venezuelan oil at a discount, and subsequently receives its full cost from the end buyer.

Part of the funds passes through the Russian-Venezuelan “Euro finance Mosnarbank”, which owns 50 percent of PDVSA. In March, the US imposed sanctions on this financial institution because of its support for the regime of Venezuelan President Nicolas Maduro.

A number of large energy companies, in particular, the Indian company Reliance Industries, participate in the scheme. According to the representative of Reliance, the Indian side buys Venezuelan oil with the help of Russian and Chinese companies. He stressed that Reliance is “in active dialogue with us state Department” on the purchase of oil from Venezuela, not to violate the sanctions imposed by Washington.

On January 28, US Treasury Secretary Steven Mnuchin announced the introduction of sanctions against the Venezuelan oil sector. The South American country will still be able to sell oil on the world market, but the proceeds will be sent to blocked accounts, access to which will not be, in particular, the head of Venezuela.