The Strategist

Eni and Repsol get a greenlight to supply Venezuelan oil to Europe

06/06/2022 - 08:56

Venezuela can compensate for the loss of Russian oil supplies to the European market by supplying oil to Italian Eni and Spanish Repsol, according to Reuters, citing five sources.

Paolo Pettigiani
Paolo Pettigiani
Local corporations have been allowed to do so by the US State Department, who sent them a letter to that effect. It's possible that deliveries will begin as soon as next month.

According to Reuters' sources, the companies have joint ventures with PDVSA, Venezuela's state-owned oil corporation, and they can use oil transported to Venezuela to pay off debts and dividends that are past due. According to one of the sources, the essential requirement was that the oil supplied "must travel to Europe, it cannot be resold elsewhere."

The volume of delivered oil will not be substantial, according to the agency's sources, and will have little impact on global fuel prices.

The US Treasury Department had already approved a license for Chevron, a major American oil firm, to begin talks about its future operations in Venezuela. Reuters had previously reported, citing sources, that the US had been unable to reach an agreement with Venezuela to remove sanctions on oil exports. Caracas might sell oil through Western corporations, according to proposals to lift sanctions.