US gives green light to allow Venezuelan oil to be transported to Europe

The US State Department agreed to allow 2 companies to resume crude oil shipments from Venezuela to Europe in a mailing statement, sources revealed.

The administration of US President Joe Biden hopes Venezuelan crude can help Europe reduce its dependence on Russia and divert some Venezuelan goods from China, two sources said.

Two European energy companies, which have a joint venture with Venezuelan state-owned oil company PDVSA, can count crude into outstanding debts and delinquent dividends, the sources said, speaking on condition of anonymity.

The key condition, one source noted, is that the oil “must be shipped to Europe, cannot be resold elsewhere”.

Washington believes that PDVSA will not benefit financially from these cashless transactions, unlike Venezuela selling oil to China present.

One source pointed out that the amount of oil Eni and Repsol are expected to receive is not large and the impact on global oil prices will be modest. However, Washington’s green light to resume the long-frozen flow of Venezuelan oil to Europe is also a positive signal.

Washington has not approved similar assistance to US oil giant Chevron Corp as well as India’s Oil and Natural Gas Corp and France’s Maurel & Prom SA.

Along with Eni and Repsol, these are also the companies that have lobbied the State Department and the US Treasury Department for permission to take Venezuelan oil to pay back billions of dollars of the country’s accumulated debts.

PDVSA has not yet scheduled Eni and Repsol to receive any shipments in June, according to the June 3 preliminary PDVSA unloading program.

The administration of President Joe Biden held top-level talks with Caracas in March, and Venezuela freed two of at least 10 US citizens jailed and pledged to resume election talks. election with the opposition. .

Last month, the Biden administration also authorized Chevron, the largest US oil company still operating in Venezuela, to talk with the government of President Maduro and PDVSA about future operations in Venezuela.

Around that time, the Ministry of Foreign Affairs America secretly sent letters to Eni and Repsol saying that Washington would have “no objection” to the two companies resuming oil sales to repay debt and bring oil to Europe, a source told Reuters.

Two other sources in Washington said the letters assure that Eni and Repsol will face no penalties if they take Venezuelan oil to collect their debts.