Amid the impending reimposition of Venezuelan oil sanctions, the state-run oil company PDVSA is actively exploring a shift towards Venezuela looking to crypto for oil sales. According to a report by Reuters citing anonymous sources, PDVSA is expediting the adoption of digital currency, specifically Tether (USDT), for its oil export transactions. This move aims to prevent the potential freezing of oil sales revenues in foreign bank accounts due to the sanctions.
Venezuela's state oil company had initially begun experimenting with Tether for oil sales in 2023. During the recent six-month period of eased sanctions, which concluded on April 15th, Venezuela's crypto oil sales saw a significant increase in exports to approximately 900,000 barrels per day in March, a level not seen in four years. Reuters also noted that PDVSA now requires new customers to maintain a digital wallet for oil purchases.
However, Venezuela looking to crypto for oil sales faces challenges. Transactions in USDT (Tether) often don't comply with the standards of most traders' compliance departments. As a result, intermediaries are necessary to facilitate these crypto payments.
In the political arena, Venezuela approaches scheduled elections on July 28th, with President Maduro's regime facing criticism for alleged efforts to block opposition candidates. The temporary easing of oil sanctions was tied to the condition of holding fair and free elections, a condition that Maduro's government has consistently failed to meet.
Meanwhile, amidst the reimposition of sanctions, Venezuela is engaged in discussions with Chevron to expand their joint venture in the Orinoco Belt, showcasing ongoing negotiations despite the geopolitical challenges.
Despite these developments, the reimposition of sanctions on Venezuela has not had a notable impact on oil markets, with prices remaining subdued despite heightened geopolitical tensions and reduced supply entering the market.
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