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India’s Reliance Industries plans to use gasoline supplies as partial payment for crude oil purchases from Venezuela after it won U.S. approval last month to resume oil trade with the cartel, three sources familiar with the terms of the deal said.
Reliance will pay the balance of the crude purchases in U.S. dollars, one of the sources said. The company was forced to stop direct purchases from Venezuela in April due to the reimposition of sanctions, but Washington authorized it to import crude from Venezuela in July.
Reliance Industries, which operates the world’s largest oil refinery, plans to supply naphtha, a refined product, from the United States to partly pay for its purchases of Venezuelan oil, the sources said, in a deal similar to previous business with state-run PDVSA, based on the company’s import and export records.
Venezuela needs naphtha as a diluent for its heavy crude.
Reliance’s two refineries in the western state of Gujarat can process about 1.4 million barrels per day (bpd) of crude. The sophistication of the plants allows the refiners to process cheaper, heavier crudes such as Mere crude from Venezuela.
The sources declined to give details on the amount and duration of the oil purchases authorized for Reliance. Washington could impose new sanctions on the South American country after a disputed election, but U.S. officials said individual oil licenses were not expected to be modified or revoked for now.
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The United States last year issued broad licenses to Venezuela’s oil industry, allowing PDVSA to export freely to markets of its choosing, boosting demand for Venezuelan oil and increasing the country’s fuel imports through swaps.
But Washington reimposed sanctions on Venezuela’s oil industry in April after President Nicolas Maduro failed to deliver on his election promises, instead granting some licenses to individuals to trade and operate in Venezuela’s energy sector.
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