Russia has seized a Venezuelan oil tanker, the NS Columbus, in the Caribbean and is attempting to garnish oil delivered to storage facility on St. Eustatius, an island near St Maarten. The Russian shipping company Sovcomflot successfully prosecuted a case against the Venezuelan oil giant PDVSA in a St. Maarten court and the tanker was seized by authorities over unpaid debts. The oil itself is subject to a ruling by the United Kingdom Admiralty Court as Russia attempts to seize the commodity as payment as well, reports Zero Hedge.
PDVSA also owes hundreds of millions in undelivered oil to Russia under a payment plan worked out previously to secure loans to the socialist Maduro government in Caracas. Despite the support Moscow has provided Venezuela in its fight to maintain the socialist nirvana in the country, it seems the Kremlin may have lost patience and is taking matters into the international courts to get paid. Russia is not in a position itself to let overdue payments slide as the Russian economy is barely growing itself and the Russian federal budget deficit persists.
In addition to debts to Russia, PDVSA owes millions in terminal fees around the Caribbean as well. The company is basically insolvent and has no liquidity. Perhaps the day of reckoning is coming. China and Russia have supported the Maduro government due to Venezuela’s strategic location and oil wealth. However, it is obvious Maduro cannot harvest the commodity effectively. The lack of investment is causing the oil infrastructure to crumble and operations to cease.
Zero Hedge reports, PDVSA’s “tangled web of payment disputes” now spans the entire world, from unpaid shipyards in Portugal and half-built tankers in Iran and Brazil to the seized cargo in tiny St. Eustatius, whose strategic location in the Caribbean made it an 18th century colonial-era trading hub.
Sovcomflot provides approximately 15% of Venezuela’s oil delivery capacity as its own tankers fall apart.