INDIA’S Reliance Industries Ltd, said yesterday (13) that it had halted supply of diluents to Venezuela’s national oil company PDVSA and will not resume such sales until sanctions are lifted.
Washington is preparing to impose “very significant” Venezuela-related sanctions against financial institutions in the coming days, US special envoy Elliott Abrams said on Tuesday (12).
The announcements come after the US secretary of state Mike Pompeo asked India to halt all crude imports from Nicolas Maduro’s regime, which the US does not recognise.
PDVSA was importing about 100,000 barrels per day (bpd) of naphtha, mostly from the US, to dilute up to 400,000 bpd of extra heavy oil and make it exportable.
Reliance’s Houston-based subsidiary was supplying diluents to Venezuela.
Reliance has not increased oil purchases from Venezuela, the company said.
“Our US subsidiary has completely stopped all business with Venezuela’s state-owned oil company, PDVSA, and its global parent has not increased crude purchases,” it said.
The administration of US president Donald Trump imposed sweeping sanctions on PDVSA in January, aimed at severely curbing the OPEC member’s crude exports to the US to pressure socialist president Nicolas Maduro to step down.
“Since the US government imposed sanctions on the government of Venezuela in late January 2019, Reliance Industries Ltd has been in close contact with representatives from the US state department to ensure full compliance,” Reliance said.
“We will continue a constructive dialogue with the US government to ensure Reliance remains in compliance,” it said.
Pompeo met India’s foreign secretary Vijay Gokhale on Monday (11) and discussed India’s purchases of oil from the Maduro-led government.
“We are asking the same thing of India as we are of every country: do not be the economic lifeline for the Maduro regime,” Pompeo said.
Venezuela a once-rich oil producing nation is in the grip of an economic and political crisis and analysts said ending diluent exports would hamper Venezuela’s output.
Venezuela is reeling from an unprecedented, week-long nationwide blackout and inflation is projected to reach 10 million per cent this year, according to the IMF.
India became the top importer of crude from Venezuela in February after the US president Donald Trump issued a de facto ban on imports.