Venezuela may divert US-bound oil to Russia & China

Sanctions-hit Venezuela may reroute crude initially destined for the US to other countries, according to the country’s top energy official, adding that shipments could go to Russia and China.

Venezuela’s oil minister and president of state-run oil company PDVSA, Manuel Quevedo, told a meeting of OPEC and other oil ministers in Azerbaijan on Monday that Caracas is going to diversify its crude shipping routes. Reuters reported that Russian state-owned oil company Rosneft and China were seen as the destinations after the country halted its crude supplies to India.

“Russia and China are seen as the main destinations because of the suspension of oil exports to India,” the Azerbaijani Energy Ministry said in a statement citing the minister.

India used to be the leading buyer of Venezuelan crude during the first half of February before facing US pressure for continuing to deal with the Latin American country after Washington slapped Caracas with heavy sanctions.

The US restrictions targeted the Venezuelan oil sector, which is crucial for Venezuela to keep the economy afloat as oil revenues account for about 98 percent of its export earnings.

Last week, Mike Pompeo accused Russia’s Rosneft of defying US sanctions against Caracas by continuing to buy oil from PDVSA. The Russian oil giant rebuffed the allegations, saying that the contracts for the purchases of Venezuelan crude were signed long before the sanctions were enforced. The company added that it does not want to engage in politics and merely carries out commercial activities in the interests of all its shareholders.

While some Western countries led by the US pledged support for Venezuela’s self-proclaimed interim president, Juan Guaido, Moscow has refused to follow suit.

Russia has several joint projects with the Latin American country, including in the energy, agricultural and defense sectors, among others and has vowed to defend its interests in the country in line with international law using “all available mechanisms.”

Earlier this month, Venezuelan President Nicolas Maduro ordered the relocation of PDVSA’s European headquarters from Lisbon to Moscow in an attempt to diminish risks for the company amid US sanctions. The new office is set to open in April when Quevedo visits the Russian capital.

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