New conflicts in the rest of the world may be looming large, but one in the United States’ own backyard is about to get more dangerous. Despite U.S.-led sanctions on Venezuela’s state-owned oil company, Petróleos de Venezuela (PDVSA), oil from the country is still flowing onto world markets. A central facilitator of the exports is Rosneft, Russia’s state-owned oil company, which has been accepting Venezuelan crude as a form of loan repayment. In this way, Russian President Vladimir Putin is playing a leading role in keeping Venezuelan dictator Nicolás Maduro afloat. As long as he does, current U.S. sanctions policy will do little to force a change in Venezuela, which is why Washington needs to rethink its strategy for dislodging the Venezuelan leader—and soon.
As PDVSA’s list of clients has shrunk, Rosneft has quickly surpassed all other companies to become the top trader of Venezuelan oil. Whereas the company handled 40 percent of PDVSA’s oil exports in July, by August, it was handling 66 percent. Recently, PDVSA even established an office in Moscow to facilitate payments to its Russian client, which has helped reduce its outstanding debt to Rosneft to $1.1 billion. At this pace, outstanding loans to Rosneft could be repaid in full sometime around the end of this year or in early 2020…
To read more visit Foreign Policy.
- Russia Should Reform Oil Taxes To Sustain Output: Energy Minister Novak
- Russia Plans To Creat A ‘Grain OPEC’