Washington wants India to Stop Buying Venezuelan Oil:
- The United States has pressed India to stop buying Venezuelan crude oil as a means of accelerating President Nicolas Maduro’s removal from office, which Washington has made its top priority in Latin America recently.
- US has been quick to throw its support behind the president of the National Assembly in Caracas, Juan Guaido, who declared himself interim president in late January and called for new, transparent elections.
- Venezuela has the world's largest known reserves of oil estimated at more than 300 billion barrels - bigger than Saudi Arabia's 266 billion barrels.
- India is not the only one that the Trump administration has been pressing to cut off oil ties with Venezuela as a way of cutting the Maduro government’s access to money, but it may be the most important yet.
- India has been Venezuela’s second-largest customer after the United States. Before the sanctions, PDVSA shipped over 500,000 bpd to the US, followed by India at more than 300,000 bpd.
- Since sanctions were announced, Venezuela’s state-run oil company PDVSA has loaded and exported 1.15 million bpd of crude and refined products
- Yet India may be a lot less willing to comply with what Washington asks it to do: the United States now wants India to stop importing Iranian oil and just last week President Donald Trump signaled a new trade war might be in the making, this time with India.
- Meanwhile, India is negotiating a sanction waiver extension for Iran, so it can continue importing Iranian crude at the rate it is doing currently, 300,000 bpd.
Venezuelan supply to India:
- Venezuela is the third largest supplier of oil to India, after the US and China, which is the world's third-biggest oil consumer, according to data compiled by Bloomberg.
- The nation’s private refiners -- Reliance Industries Ltd. and Nayara Energy Ltd. (formerly Essar Oil Ltd.) -- are the primary buyers.
- That’s because their advanced refining systems can process the thick Venezuelan grade into high-value fuels such as low-sulfur gasoline and jet fuel.
- In contrast, state-owned refiners generally won’t benefit from more Venezuelan crude as their facilities can’t handle the low quality.
- PM Modi generally avoids taking contentious stands on active geopolitical developments, particularly when it comes to the internal politics of trading partners.
- Venezuela is its fourth-biggest crude supplier, behind Iraq, Saudi Arabia and Iran.
- However, Foreign Affairs secretary, Vijay Gokhle has discussed the situation regarding oil purchasing with US secretary of state Mr Mike Pompeo during their metting.
- Earlier, India and seven other countries were given a six month exemption from U.S. sanctions on trade with Iran and allowed to purchase a limited quantity of Iranian oil without facing sanctions.