Embattled Venezuelan President Nicolas Maduro is channeling cash flow from its oil sales through Russia’s state-run energy giant Rosneft firm, seeking to evade the US sanctions imposed on Venezuela by the United States, as per the reports citing documents and sources.
According to Al-Jazeera news reports, this oil sale is the latest sign of growing cash-strapped Venezuelan government’s dependence over Russia as US President Donald Trump tried to tighten a financial noose around Maduro’s neck.
With Venezuelan economy reeling and a sharp decline in state oil production, Caracas has been struggling to government spendings and financial imports even before Trump hit the country with sanctions and punitive measures over the state oil firm PDVSA.
Oil accounted for above 90 percent of exports from the OPEC and shares of government revenues of the lion. Maduro has accused the US president of couping an economic war against Venezuela.
Maduro’s regime has been trying to bypass a ban over PDVSA’s clients in dollars, in talks with Russia, according to sources. Russia has publically termed the US sanctions as “illegal” and said to continue to cooperate with Venezuela in order to weather the nation.
Under the scheme which was uncovered by Reuters, Venezuelan state oil PDVSA firm has initiated invoices to Rosneft from its oil sale.
Russian Rosneft pays Venezuelan PDVSA at a discount to the sale price in order to avoid the 30-to-90 days timeframe to for the completion of transactions, and then collect the complete amount from the buyers, as per the sources reports and documents.
A source with knowledge of the agreements, at the Venezuelan state firm, stated, “PDVSA is delivering its accounts receivable to Rosneft.”
However, Venezuelan oil ministry, information ministry, and PDVSA did not respond to a request for comment.
Reliance spokesperson, asked about transactions, said it had many times made payments to Chinese and Russian companies for Venezuelan oil. The spokesperson stated the payments were deducted from money which Venezuela owed to those nations, but however, did not provide further details.
“We are in active dialogue with the US Department of State on our dealings on Venezuelan oil to remain compliant with US sanctions,” said the spokesperson.