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Indian oil refiners plan to curtail purchases of Venezuelan oil in April (sources)

UNITED STATES (OBSERVATORY NEWS) — Indian oil refineries Reliance Industries and Nayara Energy plan to phase out Venezuelan oil purchases in April, fearing that future U.S. sanctions might block trading opportunities with Venezuelan state-owned PDVSA, three sources familiar with the situation said.

This move Reliance, which controls the world’s largest refinery, and Nayara, partly owned by Rosneft, could lead to serious cuts in purchases of Venezuelan oil by India. In January, India accounted for about a third of supplies from Venezuela.

U.S. President Donald Trump this week warned of increased sanctions in an attempt to remove Venezuelan President Nicolas Maduro, whose re-election in 2018 was not recognized by most Western countries.

In February, the White House added Rosneft Trading SA, a Geneva-based subsidiary, Rosneft Trading, to the list of authorized companies due to suspected purchases and resale of Venezuelan oil.

The US has set a deadline for Rosneft Trading partners until May 20 to stop buying oil from the company.

Reliance, a longtime PDVSA client, has yet to place requests for April shipments, one source said.

Nayara Energy plans to stop processing Venezuelan oil at its refineries after receiving two cargoes in March, two sources said.

PDVSA and Reliance did not respond to comment requests. Nayara said it complies with all U.S. sanctions. “We reaffirm our commitment to this position after recent announcements,” a written commentary for Reuters says. Rosneft did not respond to a request for comment.

Rosneft harshly criticized US sanctions, saying that the oil received does not generate cash for PDVSA, but is used to repay loans. The company also accused the Trump administration of discriminatory treatment.

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