Cessation of Indian refinery purchases exacerbates Venezuela crisis

(Bloomberg) – India’s largest private refinery has suspended purchases of Venezuelan crude, putting more pressure on the embattled oil industry in the Latin American country.

Reliance Industries Ltd, which runs the world’s largest refinery in Jamnagar and accounted for 25% of Venezuela’s exports last year, has no plans at this time to make future purchases, according to people with knowledge of the situation who requested to remain in the anonymity because the information is not public.

The refinery thus joins buyers who avoid oil produced by the Nicolás Maduro regime after US refiners, China National Petroleum Corporation and Rosneft Trading SA suspended supplies amid sanctions on Venezuela’s oil sector.

The last time Reliance processed a shipment of Venezuelan oil was in March, and it received the shipment in May, data compiled by Bloomberg shows. Reliance has bought 117,650 barrels a day of Venezuelan crude this year, 46% less than last year due to the collapse of the country’s oil production. Since June, Venezuela has been shipping crude to China, Cuba, Spain, and Italy. The shipments to Europe are being used to pay off old debts and do not generate the cash so badly needed by the Latin American regime.

Nayara Energy Ltd, backed by Rosneft Oil Co PJSC, India’s second-largest private refinery, has also not loaded Venezuelan crude since March, data compiled by Bloomberg shows. It turned to supplies from Canada, Kuwait and Ecuador to cover the deficit, data from shipping reports show. A Nayara spokesperson said the company could not immediately comment when contacted by email.

Reliance has been buying oil from the United States, Colombia and Ecuador, the data shows. Last year, the Mumbai-based refinery resumed imports of oil from Venezuela for payment in diesel, measures that met the sanctions, he said. Reliance and Petróleos de Venezuela SA did not immediately respond to emails seeking comment.

Venezuela, which has the largest oil reserves in the world, has struggled to sell cargo after the latest rounds of sanctions targeting shipping companies that transport their oil and Mexican merchants Libre Abordo SA de CV and Schlager Business Group, the main buyers of oil produced by Caracas. Exports plummeted to a 73-year low in May and are expected to drop further in June.

Original Note: Venezuela Oil Crisis Deepens With India Refiners Halting Imports

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