Oil from sanctioned Venezuela to help Europe replace Russian crude as soon as next month: report
- Two European energy companies are expected to start importing Venezuelan oil, Reuters reports.
- Venezuela has the world's largest oil reserves but hasn't been allowed to ship to Europe since 2019.
Venezuela is expected to start shipping oil to Europe as soon as next month, sources told Reuters, as the continent continues to cut out Russian energy.
Five people familiar with the matter told Reuters that Italian oil company Eni and Spain's Repsol could start importing Venezuelan crude as early as next month, resuming supplies halted after the US imposed sanctions in 2019.
The sources said the amount of oil was likely to be small and wouldn't affect global oil prices, which are hovering near 14-year highs.
The agreement would allow oil to be shipped in exchange for reducing debt racked up by the Venezuelan government as its inflation rate reached stratospheric levels in 2018.
According to BP, Venezuela has the world's biggest oil reserves. The US has gradually sanctioned Venezuelan companies and individuals over the years for money laundering and terrorism activities.
Sources told Reuters it was hoped the loosening of restrictions would encourage Venezuelan president Nicolas Maduro to restart talks with Venezuela's opposition following an attempted coup.
Other companies including Chevron, India's Oil and Natural Gas Corp and France's Maurel & Prom had also lobbied the US government to accept debt-for-oil swaps but they had not yet succeeded.
European countries are racing to find other sources of oil to replace Russian supplies. It had been the biggest exporter of oil to the continent.
In an interview with Europe1 on Sunday, French finance minister Bruno Le Maire said Paris was talking to the United Arab Emirates about replacing some Russian oil and diesel.
Meanwhile, the US is also expected to allow more oil to flow from Iran, another sanctioned country, Mike Muller of Vitol told a podcast produced by Gulf Intelligence on Sunday.
Eni and Repsol didn't immediately respond to a request for comment.