& Tobago

Very usefull links


News links




Dow Jones

Oil price



Views and News




New US sanctions impact on Venezuela's crude exports on US action on China and Russia

Alessandro Scagliusi/Dreamstime

On April 28, the US prohibited transactions between non-US firms and PDVSA involving the US financial system, essentially banning the use of US dollars in all transactions with PDVSA.

By Jeff Mower / Platts

Petroleumworld 08 09 2019

New US sanctions against Venezuela will likely impact the country's planned crude exports in August, but by how much depends on the US government's willingness to sanction Russian and Chinese companies.

PDVSA plans to export 680,000 b/d of crude in August, of which just 43,000 b/d is going to a company with a waiver from the US government, Sweden's Nynas, according to a PDVSA document seen by S&P Global Platts.

That leaves 637,000 b/d of crude exports that could be impacted if buyers are deterred by the US sanctions.

"If US sanctions were extended they could impact 95% of the crude exports planned for August," said the PDVSA official who spoke on condition of anonymity. "PDVSA will have to grant great discounts and even sell at a loss to export."

Nynas, which has been given a waiver to do business with PDVSA until October 25, is a joint venture between PDVSA's PDV Europa and Neste Oil.

However, the bulk of PDVSA crude is exported to pay debts, specifically to China and Russia.

Roughly 293,000 b/d of crude is scheduled to be exported to China in August, which will go to repaying debts, the PDVSA document showed. The PDVSA source said the company was hoping to export at least 3.9 million barrels in August, or roughly 125,800 b/d, to Rosneft, also to repay debts.

While only Nynas has been given an official waiver to import Venezuelan crude, crude exported to pay off debts so far seems to have fallen outside of the scope of US sanctions.

On April 28, the US prohibited transactions between non-US firms and PDVSA involving the US financial system, essentially banning the use of US dollars in all transactions with PDVSA.

Rosneft said in May it had come to an agreement with US authorities for delivery of Venezuelan crude to Rosneft's Indian refinery, as the supplies were carried out under prepayment contracts.


The US has yet to officially acknowledge any such agreements, and it is thought that Monday's executive order signed by President Donald Trump was intended to address that loophole.

The order blocks individuals or entities deemed to have supported the Venezuelan government, and applies to PDVSA.

"It remains unclear if [the new sanctions] will cause Russian and Chinese entities to take less Venezuelan crude, but at this point we expect geopolitical factors and Venezuelan investments from both countries to prevent a major change," S&P Global Platts Analytics Chief Geopolitical Adviser Paul Sheldon said. "If US law moves to prohibit all Venezuelan oil exports to third countries, market focus will shift to compliance and enforcement, as is already the case with Iran."

The US could sanction Russian or Chinese firms, but that appears "unlikely," said Eurasia Group analysts in a report.

The US "has shown a proclivity to avoid major sanctions on large foreign-owned firms, including Rosneft, which is PDVSA's main facilitator in avoiding existing sanctions," the analysts said.

"Moreover, even in the event of secondary sanctions, Maduro's allies can find ways to evade consequences, as evidenced by the case of Iran," the analysts said. "This includes using certain banks with limited exposure to the dollar payments system or already under sanctions."

Buyers of Venezuelan crude are "unlikely to shift their behavior since they are benefitting from significant discounts on Venezuelan crude and if anything, PDVSA is shifting its output to meet their demands by moving away from upgrading to blending."

PDVSA still has significant debts with Rosneft. From June 2014 to November 2016, PDVSA and Rosneft had signed six prepaid contracts, which include payments with crude oil and refined products. Of these contracts, only one has been completely canceled.

Rosneft is a partner with PDVSA in several upstream joint ventures, including PetroMonagas, PetroPerija, PetroVictoria, Boqueron and PetroMiranda.


Story by Jeff Mower, Newsdesk-Venezuela; Edited by Richard Rubin from S&P Global Platts. 08 08 2019


We invite you to join us as a sponsor.Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.


Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions as the source.

Other stories you have to get authorization by its authors. Internet web links to are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to:

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1



Editor & Publisher: Elio Ohep/
Contact Email:

CopyRight © 1999-2019, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2019, Petroleumworld   / Elio Ohep - All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.