The US is considering the option of imposing additional sanctions on the Russian oil company Rosneft, which has not merely continued trading oil with Venezuela, but has increased its trade despite the sanctions on the Nicolas Maduro government, said US Special Representative for Venezuela Elliot Abrams at a press conference on Tuesday.
“Throughout this entire year, we have been seeing the growing dependence of the Venezuelan PDVSA and regime on the Russian government and on Rosneft. Constantly increasing volumes of Venezuelan oil are being sold to Rosneft. Rosneft then resells it,” said Abrams, adding that the transfer of the PDVSA’s head office to Moscow is further evidence of the support that Russia is giving to the internationally isolated Madura.
“It’s clear that Rosneft is getting more money from trading with Venezuela,” RIA Novisti cites Abrams as saying. “They are buying more and more oil from Venezuela with a large discount, and are selling them refined oil products in exchange. In other words, they are helping Venezuela and profiting from it,” he remarked.
According to Rosneft’s own reports, the company more than doubled its oil purchases on the “international market” in the first half of the year, buying 109.7 million barrels, around 600,000 barrels per day.
This volume equates to nearly 80% of Venezuela’s current oil extraction, which had dropped to 774,000 barrels per day by June according to OPEC.
“At some stage we will still deal with the matter of a possible response to Rosneft’s actions,” Abrams warned. When asked whether the response could take the form of sanctions, he said: “Yes, it’s possible.”
Following China’s refusal to work with Venezuela in August, Rosneft effectively became the PDVSA’s only remaining major buyer, Bloomberg reported, citing sources in the market.
The China National Petroleum Corp, which had been Maduro’s permanent client for more than 10 years and was buying half of Venezuela’s oil at the start of the year (339,000 barrels per day), reportedly canceled the deliveries that had been scheduled for August.
Despite the trade war with Washington, China has been trying to minimize the risk of US sanctions on Venezuela, which were tightened again in August, two informed sources told the news agency.
As part of the new round of measures designed to stifle the Maduro regime, the US has announced the freezing of all Venezuelan government assets in its territory, de facto prohibiting transactions through the US banking system and the associated structures.
Rosneft considers the threat of US sanctions a case of “unscrupulous competition” and reserves the right to protect its investments through national and international judicial bodies, the company said in a response.
“Rosneft is an investor in Venezuela’s oil and gas sector and was one long before the US imposed sanctions on Venezuela. Accordingly, any attempts to limit the return on investment received by the company or its subsidiaries in any legislatively acceptable forms, in particular through shipments of Venezuelan oil and counter-shipments of oil products as repayment of the existing debt, or through
involvement in joint enterprises, would constitute illicit expropriation of such investments by the US authorities,” Rosneft said in a statement.