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Russian Oil Imports Surge in U.S. as Venezuela's Slow to a Trickle

March 04, 2019

Only two ships carrying 766,000 barrels of crude oil from Venezuela arrived in the United States last week in the wake of debilitating oil sanctions lodged against the state-run oil company, PDVSA, according to investment bank Caracas Capital Markets, which tracks Venezuelan oil shipments.

Russian companies, meanwhile, sent nine ships carrying more 3 million barrels of crude oil and petroleum products, according to a review of the U.S. Bill of Ladings database by Caracas Capital...

While U.S. refiners can continue to buy Venezuelan oil for the next couple months, any proceeds paid for the oil must be directed to a special account controlled by the U.S. Treasury.

Without a way to collect payment, Venezuelan oil executives have started to self-embargo oil exports to the United States.

“That is what the administration is hoping, to starve the regime of financial resources,” said Eric Farnsworth, a former State Department official who is now a vice president of the Council of the Americas in Washington. “And the biggest fattest target there, essentially the only target, is oil exports and the U.S. has huge leverage there so that’s why they implemented that sanction.”

But Farnsworth warns that the administration has a limited window of time to take full advantage of the opportunity that the sanctions present. The longer Maduro is able to remain in power amid the sanctions, the more likely it is that Caracas will be able to find alternative buyers of its heavy crude oil...

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