Representatives of fuel suppliers to Venezuela, importers of Venezuelan oil and advocacy groups said this month they plan to press the incoming administration of U.S. President-elect Joe Biden to reverse a ban on crude-for-diesel swaps, Reuters reported.
The Trump administration since the last quarter of 2020 has barred companies from sending Venezuela diesel in exchange for crude. Those deals were exempted for more than a year from sanctions on state oil company Petroleos de Venezuela SA, aimed at ousting President Nicolas Maduro, who has overseen an economic collapse.
That has prompted concerns about the humanitarian impact of a possible deficit of diesel, widely used in Venezuelan public transportation, agriculture, and as fuel for generators used as a backstop for frequent blackouts. Farmers are already warning that shortages are impeding sugar harvesting and rice planting.
A more acute scarcity of diesel would add to widespread gasoline shortages in Venezuela, as domestic refineries are working at a fraction of their installed capacity. Washington has not authorized PDVSA’s customers to supply the crisis-stricken OPEC nation with gasoline for over a year.
“Public transit uses a lot of diesel,” said Feliciano Reyna, president of Caracas-based aid group Accion Solidaria focusing on HIV/AIDS treatment and other medical relief activities.
“We hope that the incoming Biden administration can take a more strategic look at the purpose of the sanctions, and can lift those that don’t change the position of the group in power and instead create problems for the population,” Reyna said.
A spokesperson for Biden, who takes office on Jan. 20, declined to comment. Biden has labeled Maduro a dictator, and advisers said he was likely to maintain some sanctions while seeking more consensus among U.S. allies about how to apply them.
Companies that frequently engaged in the swaps with U.S. government authorization include India’s Reliance Industries Ltd, Spain’s Repsol SA, and Italy’s Eni SpA. The permits allowed the firms to refine Venezuelan crude in exchange for diesel even amid sanctions.
A person close to Reliance said the company had sent Biden allies briefing materials on the potential humanitarian fallout of the ban on diesel swaps in the hopes the new administration would reinstate the exemption.
“Our objective is, do it on Day 1,” said the person, who spoke on the condition of anonymity. The person added that the Trump administration in November turned down a request from the company to participate in a swap offered by PDVSA that would have let the firm import Venezuelan crude in exchange for diesel.
A Repsol spokesman said the company “is in constant dialogue with the authorities in Venezuela and the U.S. to ensure that the company remains compliant,” and said the company would “continue its engagement with the incoming Biden administration.” An Eni spokesman said it was “premature” to comment on the issue.