Reuters on Friday reported that Venezuela has exchanged millions of barrels of crude for supplies of corn and water trucks under a joint deal with a Mexican firm, citing PDVSA export programmes.
It said this was in a bid to safeguard imports amid stricter U.S. sanctions.
The private Mexican firm Libre Abordo, which has hitherto had no expertise in the oil sector, has so far taken 6.2 million barrels of Venezuelan heavy crude to further resell it on international oil markets.
The news agency specified that it has two more oil and fuel cargoes due to be processed.
Meanwhile, Venezuelan state-owned oil company PDBSA has seen its international customer portfolio drastically shrink in the wake of U.S. limitations slapped on Venezuela, its top officials, and state-run companies.
In a statement sent to Reuters, Libre Abordo said the contract to export Mexican corn and water to Venezuela in exchange for oil cargoes was inked in 2019 and it still applies with no fixed deadline.
The company said, “ these are not buy-sell contracts. Libre Abordo has been very cautious.
“The contract is considered humanitarian aid.’’
It said that received oil cargoes, stipulated by the deal, are being resold quickly and the clients are taking possession of them at PDVSA’s ports with Libre Abordo unaware of the final destination or use.
According to the company, as was concluded from consultations with lawyers, the exchange is not in violation of the U.S. sanctions since there are no cash payments involved in the deal: oil serves as a compensation for food aid.
The lawyers, whose names and employer Libre Abordo declined to name, gave some findings in their review.
“Based on the information we have received, it appears that Libre’s acquisition of title to PDVSA cargo in satisfaction of the pre-existing debt obligations occurred entirely outside of U.S. primary sanctions jurisdiction,’’ they said.
Governments around the world have called on Washington, an ardent critic of Venezuela’s President Nicolas Maduro, to ensure that sanctions do not cause the country to wind up in a real humanitarian crisis.
Political woes mounted in Venezuela in January 2019 when Juan Guaido, the head of the opposition-controlled Congress, proclaimed himself interim president in a bid to oust re-elected Maduro from power.
Maduro has called Guaido a U.S. puppet, conspiring with Washington to push through a coup in the country so that they can grit out control over Venezuela’s natural resources.
The U.S. government has introduced sanctions against Venezuela and its officials in recent years, as well as withdrawn its assets from oil firm PDVSA in a bid to force President Nicolas Maduro to resign.
It has brought about a severe economic crunch in the Latin American country, with the authorities struggling to overcome soaring inflation, as oil exports – key to the Venezuelan economy – have largely been paralysed.
According to lawyers cited by the company, the practice does not contradict U.S. primary sanctions jurisdiction since the swap, which is in no way a buy-sell contract, entails no cash transactions.
