Indian conglomerate Reliance Industries is planning a crude-for-naphtha swap deal to resume crude oil trade with Venezuela, reported Reuters, citing sources.
This move comes after the company received approval from the US last month to restart oil transactions with the sanctioned South American nation.
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Reliance will use naphtha supplies as partial payment for crude purchases, with the balance paid in dollars.
The deal allows Reliance to supply naphtha from the US as a partial payment for Venezuelan oil purchases.
This arrangement mirrors previous trades between Reliance and Venezuela’s state company PDVSA.
Venezuela requires naphtha to dilute its heavy crude oil, and Reliance’s refineries in Gujarat state are equipped to process the heavy Merey crude from Venezuela.
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By GlobalDataReliance, which operates a 1.4mbbl/d refining complex, had to halt direct purchases from Venezuela in April due to renewed sanctions.
However, in July, the US authorised Reliance to import crude from the country.
The details of the volumes and the duration of the US authorisation for Reliance’s Venezuelan oil purchase have not been disclosed.
Despite the potential for new sanctions following a disputed election in Venezuela, US officials have indicated that individual oil licences are not expected to be altered or revoked at present.
Last year, the US administration granted a broad licence to Venezuela’s oil industry, allowing PDVSA to export freely, which led to increased demand for Venezuelan oil and a rise in the country’s fuel imports through swaps.
However, the re-imposition of sanctions by Washington in April in response to President Nicolas Maduro’s failure to meet election commitments, led to the granting of individual licences to operate in Venezuela’s energy sector.
This caused overbooked loading schedules at Venezuelan ports and subsequent delays in Reliance’s resumption of oil imports.
Asian buyers have also faced similar issues, with Venezuelan production not increasing quickly enough to meet contracts.
This has resulted in delivery delays of up to 60 days for importers of Venezuelan oil in Asia.
Concerns over the potential withdrawal of the licence led Reliance to limit direct loadings of Venezuelan crude earlier this year, affecting vessels in transit or at Venezuelan ports.
