Spanish oil company Repsol and Italy’s Eni could start shipping Venezuelan oil to Europe next month to offset Russian crude, five people familiar with the matter said, resuming oil-for-debt swaps halted two years ago when Washington stepped in by ratcheting up sanctions. to Venezuela.
The volume of oil Eni and Repsol are expected to receive is not large, one of the sources said, and any impact on world oil prices will be modest. But the green light from Washington to resume flows of frozen oil from Venezuela to Europe could provide a symbolic boost for Venezuelan President Nicolás Maduro.
The US State Department gave the two companies the go-ahead to resume shipments in a letter, the sources said. The administration of US President Joe Biden hopes that Venezuelan crude can help Europe reduce dependence on Russia and redirect some of Venezuela’s cargoes from China.
Convincing Maduro to restart political talks with Venezuela’s opposition is another goal, two of the sources familiar with the matter told Reuters.
The two European energy companies, which have joint ventures with Venezuela’s state oil company PDVSA, can count crude shipments for unpaid debts and overdue dividends, they explained. A key condition, one of the people said, was that the oil received “has to 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, that person said. China has not signed up to Western sanctions against Russia and has continued to buy Russian oil and gas despite calls from the United States.
Authorizations arrived last month, but details and resale restrictions have not been previously reported. Eni and Repsol did not immediately respond to requests for comment on the matter.
