President Nicolas Maduro is funneling cash flow from Venezuelan oil sales through Russian state energy giant Rosneft as he seeks to evade U.S. sanctions designed to oust him from power.
With its economy reeling from years of recession after a sharp decline in oil prices, Venezuela was already struggling to finance restricted imports and government spending before Washington derailed state oil company PdVSA in 2016.
Oil accounts for more than 90% of exports from the OPEC nation and the lion’s share of government revenues. Maduro has accused the US regime of waging economic war against Venezuela.
Maduro’s administration has been in talks with allies in Moscow about ways to circumvent a ban on clients paying PdVSA in dollars. Russia has publicly said the US sanctions are illegal and it would work with Venezuela to weather them.
Now, the Venezuelan state oil company PdVSA has started passing invoices from its oil sales to Rosneft.
The Russian energy giant pays PdVSA immediately at a discount to the sale price. Major energy companies such as India’s Reliance Industries Ltd, have been asked to participate in the new set up by paying Rosneft for Venezuelan oil.
A spokesperson for Reliance said it had made payments to Russia and Chinese companies for Venezuelan oil. The spokesperson said the payments were deducted from money owed by Venezuela to those countries, but did not provide further details.
ABC Flash Point OPEC News 2019.