Indian refiners have resumed Venezuelan oil purchases through intermediaries, with Reliance set to meet executives from state firm PDVSA next week to discuss direct sales following the easing of U.S. sanctions on the South American country, people familiar with the matter said, according to Reuters.
Trade resumed between the OPEC producer and the second largest destination for its oil after Washington in October temporarily lifted sanctions banning Venezuelan oil exports, prompting a flurry of spot sales of crude and fuel through middlemen and traders, mostly to China. But Venezuela's oil output has been volatile, limiting what it can offer for export. India last imported Venezuelan crude in 2020. Access to Venezuela's heavy oil could cap import costs for India, which has become a major Russian oil buyer, and further reduce its reliance on the Middle East. Three Indian refiners have bought some 4 million barrels of Venezuelan crude for February delivery at between $7.50 and $8 per barrel below dated Brent on a delivered ex-ship basis, five trade sources said. Of those, trading house Vitol sold 1.5 million barrels to Indian Oil Corp and 500,000 barrels to HPCL-Mittal Energy, a joint venture between state-run Hindustan Petroleum Corp and Mittal Energy Investment, they added. Reliance had previously received an offer for a prompt cargo at $16 a barrel below dated Brent on a free-on-board basis, another source said, but it was unclear if the deal had gone through.
The South American country is producing some 850,000 barrels per day (bpd) of crude with a target of soon reaching 1 million bpd, Venezuela's deputy oil minister said last month, a goal it has repeatedly missed. Reliance once was PDVSA's second-largest crude customer and in turn an important supplier of fuel to Venezuela. "The Reliance team has already scheduled meetings with PDVSA executives in Caracas," one of the people said, adding that the discussions are expected to include crude sales to India and fuel imports for Venezuela. PDVSA, Reliance, IOC, HPCL-Mittal Energy and Vitol did not immediately respond to requests for comment.
The Venezuelan firm is separately negotiating crude sales to PetroChina (601857.SS), but no deal has been signed.
