India Advises Refiner to Avoid US System for Venezuela Crude Purchase
India has asked one buyer of Venezuelan oil to consider paying the South American nation’s national oil company PDVSA in a way that avoids the US financial system, an Indian government source said, after Washington imposed fresh sanctions on Venezuela last month.
The United States is seeking to cut off Venezuela’s oil revenue and pressure the nation’s President Nicolas Maduro to step down after it recognized opposition leader Juan Guaido as head of state, Reuters reported.
Sanctions mean that if oil buyers pay PDVSA through the US banking system, the funds could be seized by US authorities.
There may also be problems for transactions by banks that have a heavy US presence even if they are not in US dollars and do not go through the United States.
The Indian buyer “expressed concern that there could be a problem in payments to PDVSA, so we have advised them to move away from the US banking and institutional mechanism”, said the source, who did not wish to be identified due to the sensitivity of the matter. He declined to name the buyer.
The sanctions limit US refiners to paying for Venezuelan oil by using escrow accounts that cannot be accessed by Maduro’s government.
India still recognizes Maduro as Venezuela’s leader, which means “it does not make sense to shift to the other (escrow) payment avenue”, the source said.
India’s Foreign Ministry on Thursday said the country was monitoring the evolving situation in Venezuela.
India, Venezuela’s second-biggest oil market after the United States, has already restricted oil imports from Iran to win a waiver from US sanctions against Tehran over its nuclear program.
source: Financial Tribune
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