RIL outsmarts US, sends fuel to Venezuela from India & EU
New Delhi/ Mexico City/ Washington DC: Reliance Industries Ltd (RIL) is selling fuels to Venezuela from India and Europe to sidestep sanctions that bar US-based companies from dealing with state-run PDVSA, according to trading sources and Refinitiv Eikon data, reported Reuters website. Reliance had been supplying alkylate, diluent naphtha and other fuel to Venezuela through its US-based subsidiary before Washington DC imposed sanctions in late January aimed at curbing the Opec member's oil exports and ousting Socialist President Nicolas Maduro.
Venezuela is the third largest supplier of oil to India which is the world's third-biggest oil consumer. At least three vessels chartered by the Indian conglomerate supplied refined products to Venezuela in recent weeks, and another vessel carrying gasoil is expected to set sail to the South American nation as well, according to the sources and data, Reuters added in its report.
A Reliance spokesman wrote to Reuters in an email: "Reliance is and will remain in compliance with the sanctions and shall work with the concerned authorities." He added that "the volume of products supplied to and crude oil imported from Venezuela have not increased." PDVSA's second-largest customer in India is Nayara Energy, partially owned by Russian energy firm Rosneft, one of PDVSA's primary allies.
Reliance has significant exposure to the financial system of the USA, where it operates subsidiaries linked to its oil and telecom businesses, among others. The Indian market is crucial for Venezuela's economy because it has historically been the second-largest cash-paying customer for the Opec country's crude, behind the United States.
Meanwhile, a top US official has said that India has been co-operating with the US on the Venezuelan sanctions and it is the "understanding" of the Trump administration that private Indian companies have stopped importing oil from the Latin American country. The US official's comment came as Washington ramps up actions on Venezuelan President Nicolas Maduro's regime, which is battling to hold onto power in the face of heavy domestic and international pressure.
The senior Trump administration official said: "My understanding is that Indian private companies, who were importing Venezuelan oil, have stopped". These companies, which also have interest in the US, are unlikely to ignore the US sanctions, he told reporters.
Responding to a question on India's response to the US efforts against the "authoritarian regime" in Venezuela, the official said that India has been co-operative with the US. "The Indians have been cooperative in communicating to the private companies," he said, adding that the issue has been part of India-US discussion. "We value our relationship with India and the strategic partnership," the official said, adding that it is natural that Venezuela, which is very important right now, would be raised in its discussions with India.
Last week, US Secretary of State Mike Pompeo, in a meet with visiting Indian Foreign Secretary Vijay Gokhale, said that he hoped India will not be the "economic lifeline" to the "authoritarian" regime of Maduro by purchasing oil from the Latin American country.