Without access to all international markets and amid the sanctions imposed by the United States on those who buy crude from Venezuela, the South American country signed in 2020 a contract with a local company to directly exchange oil for food.
As reported ReutersState oil company PDVSA signed the agreement in December last year with the aim of exchanging six million barrels of crude (worth about US $ 270 million) with a little-known company called Supraquimic. That company gave the government of Nicolás Maduro food in exchange.
However, according to Reuters, the deal collapsed when PDVSA accused two of the Supraquimic executives of misrepresenting the earnings.
The objective of Venezuela’s strategy is to continue exporting oil, a key asset of that country’s economy, despite US sanctions.
Nobody from the Venezuelan government wanted to talk about the issue. Neither PDVSA nor the different ministries involved. Neither does justice.
Maduro has on other occasions described the sanctions of the United States as illegal and blames the government of that country for the problems of Venezuela.
The contract with Supraquimic shows that with no other economic alternative in sight, the country is surviving on bartering crude.
Maduro even spoke last year of using oil to purchase covid-19 vaccines.
The antecedent has to do with international trade. In 2019, with Donald Trump in the United States government, the White House included PDVSA in the blacklist of companies with which you cannot do business.
To get around this pitfall, a series of new companies emerged, with no oil experience, that buy crude from PDVSA and then sell it in the United States.
In that group of companies there are Mexican and Russian firms, says the Reuters report.
This strategy is giving good results, since the inclusion of new players has allowed Venezuela to drastically grow oil exports in 2021, according to reports from PDVSA itself and the consultancy Refinitiv Eikon.