India's Nayara Energy has been using Russian giant Rosneft as an intermediary to acquire Venezuelan oil, paying it in fuel rather than cash to avoid violating US sanctions, three sources with knowledge of the transactions said.
The United States in January prohibited US-dollar transactions for oil sales from Venezuela's PDVSA or its units, a measure intended to cut off cash flows and increase pressure on President Nicolas Maduro, whose 2018 re-election has been dismissed as a sham by Washington.
The sanctions have made some banks wary of processing any transaction for Venezuelan oil, even if the seller is not the state-run company. They have also scared away some of PDVSA's customers, while prompting others to buy Venezuelan crude from intermediaries like Rosneft, the sources said.
In exchange for the Venezuelan oil, Nayara, part-owned by a Rosneft-led consortium, is shipping cargoes of gasoline and gasoil to the Russian firm, according to the sources, who declined to be named as they are not authorized to speak to media.
The United States further tightened sanctions on Venezuela in August, threatening non-US companies with punitive action if they 'materially assist' Maduro's government.
But Washington has said that firms, including Rosneft, that take Venezuelan oil to monetize loans are not violating sanctions as long as cash does not reach Maduro's coffers.Rosneft declined to comment. Nayara Energy and PDVSA did not reply to requests for comment.
Crude-for-fuel swaps are a way around the complications that have arisen because of the sanctions...READ MORE
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