Reliance, an Indian conglomerate controlled by billionaire Mukesh Ambani, has significant exposure to the financial system of the US.
New Delhi/Mexico City: Reliance Industries is selling fuels to Venezuela from India and Europe to sidestep sanctions that bar US-based companies from dealing with state-run PDVSA, according to trading sources and Refinitiv Eikon data.
Reliance had been supplying alkylate, diluent naphtha and other fuel to Venezuela through its US-based subsidiary before Washington in late January imposed sanctions aimed at curbing the OPEC member’s oil exports and ousting Socialist President Nicolas Maduro.
At least three vessels chartered by the Indian conglomerate supplied refined products to Venezuela in recent weeks, and another vessel carrying gasoil is expected to set sail to the South American nation as well, according to the sources and data.
A Reliance spokesman wrote to Reuters in an email and said: “Reliance is and will remain in compliance with the sanctions and shall work with the concerned authorities.”
He also said “the volume of products supplied to and crude oil imported from Venezuela have not increased.”
Reliance, an Indian conglomerate controlled by billionaire Mukesh Ambani, has significant exposure to the financial system of the US, where it operates subsidiaries linked to its oil and telecom businesses, among others.
The Indian market is crucial for Venezuela’s economy because it has historically been the second-largest cash-paying customer for the Opec country’s crude, behind the United States.
Additional sanctions against Venezuela are possible in the future, as US President Donald Trump’s administration has not yet tried to prevent companies based outside the United States from buying Venezuelan oil, a strategy known as “secondary sanctions.”
Refinitiv Eikon trade data shows that Reliance shipped alkylate, a component for motor gasoline, to Venezuela on vessels Torm Mary and Torm Anabel in recent weeks.
Those originated in India and passed through the Suez Canal.
It also shipped a gasoline cargo using tanker Torm Troilus to Venezuela and is preparing to send 35,000 tonnes of gasoil in a vessel called Vukovar to the South American nation.
“Reliance is also supplying some products from its Rotterdam storage,” a source familiar with Reliance’s operation said.
PDVSA did not reply to a request for comment.
In a statement last week, Reliance said its US unit has completely stopped all business with PDVSA. Reliance also halted all supply of diluents including heavy naphtha to Venezuela and does not plan to resume such sales until sanctions are lifted, according to the release.
Venezuela has overall imported some 160,000 barrels per day of fuel and diluents for its extra heavy oil output since the US measures were imposed, according to PDVSA and Refinitiv data.