With most of Europe facing an economic crisis following Russia’s invasion of Ukraine, the United States has stepped in to relax some of its sanctions on Venezuela so that oil shipments can be resumed to keep several states from facing further hardships.
According to several international reports from Reuters, Nasdaq, and Hart Energy, Italian oil company Eni SpA and Spain’s Repsol SA could begin shipping Venezuelan oil to Europe as soon as next month to make up for Russian crude. This would apparently allow for the resumption of oil-for-debt swaps which were halted two years ago when Washington stepped up sanctions on Venezuela.
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The volume of oil Eni and Repsol are expected to receive is not large, and any impact on global oil prices will be modest. Be that as it may, it is believed by industry stakeholders that Washington’s greenlight to resume Venezuela’s long-frozen oil flows to Europe could provide a symbolic boost for Venezuelan President Nicolas Maduro.
OilNOW understands that Russia currently supplies 27 percent of the European Union’s imported oil and 40 percent of its gas, which has not been sanctioned yet. Europe’s US$430 billion a year oil bills in part pay for Russia’s devastating war in Ukraine.
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Following a suite of sanctions it imposed in response to Russia’s aggression, Europe has been forced to find quick alternatives to Russian energy.
The war has resulted in choked supply chains, created shortages around the world and soaring oil prices.