RIL to use diesel to pay for Venezuelan crude

Indian private-sector refiner Reliance Industries (RIL) said it will pay for Venezuelan crude via exports of diesel in a barter arrangement complying with US sanctions on the Latin American nation.

No further details about the arrangement were available.

Indian refiners RIL and Russian Rosneft-owned Nayara Energy are the only buyers of Venezuelan crude from India. Venezuela shipped around 308,000 b/d of crude during January-August to India's ports on the west coast in Gujarat state, according to Indian customs data. RIL imported at least 116,000 b/d of crude during the period from Venezuela into its special economic zone in Jamnagar, home to the company's 704,000 b/d export-oriented refinery. It was buying the crude via Rosneft.

The balance 192,000 b/d of Venezuelan oil during January-August was delivered to Vadinar, Sikka and Mundra ports with the crude shared between RIL and Nayara. Nayara operates a 400,000 b/d refinery at Vadinar.

RIL said in March that it would cap its purchases of Venezuelan supplies, then later in the month stressed it had reduced purchases of Venezuelan crude to well below contracted levels. The company has already stopped shipping diluent naphtha to Venezuela, denying it ever has sidestepped US sanctions in supplying products to Venezuela.

Indian crude imports from Venezuela fell to 260,000 b/d in August from 420,000 b/d a year earlier. These imports averaged $53/bl in August, one of the lowest priced crudes for the month. The US imposed sanctions in January blocking US sales of naphtha and effectively banning the purchase of Venezuela's crude using US financial services.