Italy’s state-run energy company Eni SpA and Spain’s largest oil company Repsol plan to ship Venezuelan crude to Europe as early as next month.
Reuters quoted a number of sources familiar with the matter on the 5th (local time) and said that the U.S. State Department allowed such a deal. However, they explained that Venezuela’s crude oil will have a small impact on global oil prices due to its small size.
The U.S. State Department’s move is interpreted as an effort to reduce Europe’s dependence on Russian oil. The European Union plans to reduce Russian oil imports by 90 percent by the end of the year.
On the 3rd, the EU imposed the 6th sanctions against Russia, including a partial ban on imports of Russian crude oil. Six months later, the EU’s board of directors has decided to ban all Russian oil imports by sea from early December and stop importing other oil products from February next year.
Sea transport accounts for about two-thirds of Russian crude oil imported into the EU. However, crude oil from the Druzva pipeline, which passes through Poland, Germany, Hungary, Slovakia, and the Czech Republic, was excluded from the ban.
The U.S. move is a lifting measure against former U.S. President Donald Trump’s sanctions on Venezuelan oil exports in 2020 to pressure the Nicolas Maduro regime.
However, Reuters analyzed that as the U.S. allowed the deal again, the Joe Biden administration could reduce the dependence of Europe on Russian energy, reduce Venezuelan oil exports to China, and give symbolic power to the Nicolas Maduro regime.
Sources said the key condition is that crude oil is shipped to Europe but cannot be resold to a third country.