Venezuela has found a new mass importer of oil, in India, hence, keeping its crude exports alive despite the de facto ban imposed by the United States. India has now become the number one buyer of Venezuela crude for the first half of February. The month saw India imports jump by 66% to 620,000 barrels a day.

Seven Venezuelan oil-laden vessels set for the United States refiners have been stranded ever since the US imposed sanctions on January 28 over a payment dispute with the state-own Petroleos de Venezuela SA. As exports to the US came to a halt, India came to the rescue and increased its imports. Indian refinery giant Reliance Industries Ltd and Nayara Energy Ltd, which is backed by Rosnet oil Co, have emerged as major importers.

The United States imposed the ban on crude imports from Venezuela as PDVSA was demanding upfront payments for the cargoes. Following the sanctions imposed by the US, the South American nation is now shifting its focus to buyers who are ready to make upfront payments, especially in India which is the country’s second-largest crude oil buyer. These sanctions are allegedly designed to undercut financial support for the Venezuelan President Nicolas Maduro and to restrict Maduro’s access to revenue generated from crude exports, which have helped his government to remain in power.

Goldman Sachs noted on Wednesday that apart from India and China there is the limited ability for non-US refiners to take on Venezuela very heavy crude because of sanctions. According to Refinitiv Eikon data, since the sanctions were announced two weeks ago, PDVSA has exported 1.15 million barrels per day of crude and refined product. The company was exporting about 1.4 million barrels per day in the month prior to the sanctions, according to the same data.

Venezuela has sent its Oil Minister Manuel Quevedo, to India in a bid to lure refiner companies including Reliance Industries and Nayara Energy, to double their crude oil imports. Addressing the media on Monday in New Delhi, Quevedo said that their country is currently exporting over 3,00,000 barrels per day to Indian buyers and that they want to double this figure.

However, shipments to long-time ally China have come down by 50% to 120,000 barrels per day. China is struggling to recover the $50 billion-plus amount loaned to Venezuela over the past 12 years. Even though India has increased imports, the overall exports of Venezuelan crude have plunged by 9%.

The US sanctions on Iran and Venezuela along with OPEC-led supply cuts resulted in the international crude oil prices rising to highest in 2019 on Monday. Crude oil prices in the United States closed at $55.89 per barrel, while on the other hand, international crude oil prices rose to $66.47 per barrel. Both of these prices are highest since November 2018.

The Venezuelan economy has been witnessing a great downfall with inflation skyrocketing. The current socioeconomic crisis began in 2010 under President Hugo Chavez and had been carried forward to President Maduro’s regime.

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