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US to allow Eni and Repsol to deliver Venezuelan oil to Europe to make up for Russia’s lack of oil

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The volume of oil that Eni and Repsol expect to receive is not high, said one person, and any impact on global oil prices will be modest. Washington’s permission to resume Venezuela’s long-frozen oil flows to Europe could give a symbolic boost to Venezuelan President Nicolas Maduro.

The US State Department has agreed that the two companies should resume deliveries by letter, sources said.

The administration of US President Joe Biden hopes that Venezuelan oil can help Europe reduce its dependence on Russia and redirect some of Venezuela’s deliveries to China.

Maduro’s persuasion to resume political talks with the Venezuelan opposition is another goal, two of them told Reuters.

The two European energy companies, which have joint ventures with Venezuelan state oil company PDVSA, can account for crude oil shipments on account of unpaid debts and overdue dividends, sources said.

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A key condition, one said, was that the oil received “go to Europe.” It cannot be resold elsewhere. “

Washington believes that PDVSA will not benefit financially from these cashless transactions, unlike Venezuela’s current oil sales to China, he said.

China did not participate in Western sanctions against Russia and continued to buy oil and gas from the country, despite calls from the United States.

Authorizations came last month, but details and resale restrictions have not been made public.

Eni and Repsol did not immediately respond to requests for comment.

Washington has not given similar allocations to US oil group Chevron, India’s Oil and Natural Gas Corp (ONGC) and France’s Maurel & Prom, which have lobbied the US for oil billions in exchange for Venezuela’s $ 1 billion debt.

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All five oil companies halted oil trade with debt in mid-2020, amid a campaign of “maximum pressure” by former US President Donald Trump, which reduced Venezuela’s oil exports but failed to eliminate it. Maduro.

PDVSA has not scheduled Eni and Repsol to take over this month, according to a preliminary June 3 PDVSA loading schedule seen by Reuters.

Venezuelan Vice President Delcy Rodriguez wrote on Twitter last month that he hoped that these US concessions “will pave the way for the total lifting of illegal sanctions that affect our entire people.”

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