U.S. markets closed
  • S&P 500

    3,911.74
    +116.01 (+3.06%)
     
  • Dow 30

    31,500.68
    +823.32 (+2.68%)
     
  • Nasdaq

    11,607.62
    +375.43 (+3.34%)
     
  • Russell 2000

    1,765.74
    +54.06 (+3.16%)
     
  • Crude Oil

    107.06
    +2.79 (+2.68%)
     
  • Gold

    1,828.10
    -1.70 (-0.09%)
     
  • Silver

    21.13
    +0.09 (+0.42%)
     
  • EUR/USD

    1.0559
    +0.0034 (+0.33%)
     
  • 10-Yr Bond

    3.1250
    +0.0570 (+1.86%)
     
  • GBP/USD

    1.2270
    +0.0009 (+0.07%)
     
  • USD/JPY

    135.2100
    +0.2770 (+0.21%)
     
  • BTC-USD

    21,069.23
    -90.52 (-0.43%)
     
  • CMC Crypto 200

    462.12
    +8.22 (+1.81%)
     
  • FTSE 100

    7,208.81
    +188.36 (+2.68%)
     
  • Nikkei 225

    26,491.97
    +320.72 (+1.23%)
     

Europe to Receive First Venezuelan Crude in Years as Sanctions Ease

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- Italian oil giant Eni Spa and Spanish refiner Repsol SA are poised to import Venezuelan crude for the first time in two years after the US eased sanctions on the South American country.

Most Read from Bloomberg

Eni booked two ships provisionally to load oil in Venezuela during June, according to people with knowledge of the situation. The vessels should load a combined 1 million barrels of diluted crude oil, known as DCO, from fields in the Faja region. Together, Eni and Repsol can lift as much as 2 million barrels for now, a person said.

The move comes as the US seeks to alleviate a supply crunch following an EU embargo on most Russian crude shipments. Eni and Repsol SA, which co-own the Cardon IV natural gas development in Venezuela, will be able to import crude from Petroleos de Venezuela SA to offset 2022’s gas sales from Cardon IV, other people said. The swap agreement was laid out in a comfort-type letter sent by the US Treasury Department to the European companies at the end of May.

The companies, which haven’t been sanctioned, severed commercial ties with the South American country in 2020 in response to intensified US sanctions that threatened to penalize banks, shipping and insurance companies doing business with the regime of President Nicolas Maduro.

The relief is good news for Venezuela. Bolstered by $100-a-barrel oil, the OPEC founding member has been increasing production steadily for the first time since sanctions were announced in 2019. With help from ally Iran, output reached 707,000 barrels a day in April, according to OPEC secondary sources.

Although that’s a far cry from where output was five years ago, when the country was pumping almost 2 million barrels daily, it’s a 47% increase from a year earlier. The easing of sanctions comes as Venezuela reduced exports in May, following lockdowns in China, the main buyer of its sanctioned oil.

Eni declined to comment while Repsol wasn’t immediately available to comment. PDVSA and Venezuela’s oil ministry didn’t immediately return emails seeking comment.

“Our Venezuela related sanctions remain in place,” a State Department spokesperson said. “We will continue to implement and enforce our Venezuela sanctions.”

Rome-based Eni is expected to take the Venezuelan oil to its own refining system. The company owns three refineries in Italy and has stakes in three other plants in Europe. It’s able to process 548,000 barrels of oil a day, according to its website.

In 2019, Europe was the destination of almost 10% of all Venezuelan oil sales, according to ship-tracking data compiled by Bloomberg. The last time Europe imported Venezuelan barrels was in September 2020, the data shows.

(Updates with details on oil loadings in second paragraph, payment details in third paragraph.)

Most Read from Bloomberg Businessweek

©2022 Bloomberg L.P.