Oil prices gain with supply fears over Libya, Rosneft

Andrew Cummings
February 20, 2020

The Trump administration on Tuesday announced it will impose sanctions on Russian oil company Rosneft for helping Venezuela circumvent USA sanctions on the socialist country's oil exports.

The Trump administration on Tuesday announced sanctions against a Russian oil firm accused of supporting the Maduro regime - the latest in a string of actions aimed at forcing the embattled Venezuelan leader from power.

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Maduro's regime has depended on aid from Russia, China, and Cuba since an attempt was made to replace him with Juan Guaido, the former president of the National Assembly of Venezuela.

Oil futures pared a decline, with Brent crude down 27 cents on the day to $57.40 a barrel at 1:03 p.m.

Administration officials said that Rosneft Trading SA, a subsidiary of the Kremlin-run Russian oil giant, of playing a "critical" role in facilitating Venezuela's export of hundreds of thousands of barrels of oil past year despite US sanctions against doing so. Rosneft said it will look into ways of protecting itself judicially.

Rosneft has been evading sanctions by using ship-to-ship transfers to obtain Venezuelan oil, a USA official said. The Moscow-based company, controlled by Russian President Vladimir Putin's government, has loaned $6.5 billion to Petroleos de Venezuela SA, the Latin American country's state-owned oil company, in exchange for crude.

"'Today's sanctions are another step in the policy of pressuring the Maduro regime to allow Venezuela to escape from its bad crisis through free and fair presidential elections", he stated.

Venezuelan oil sales fell to a 34-year-low in 2019 after sanctions cut off trade with the USA, until then the country's biggest customer. It has also given the companies doing business with Rosneft Trading 90 days to disentangle those arrangements. Its current waiver from sanctions expires in April. Rusal, which threw global aluminum markets into turmoil.

Rosneft Trading has been involved in a variety of worldwide relationships for the Russian producer. Recent company documents offering crude and refined oil products for sale don't mention the Switzerland-based trading arm.

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