Indian Nyara Energy has been buying Venezuelan crude oil from Rosneft and paying in fuel instead of cash to avoid a breach of U.S. sanctions against Caracas, Reuters reports, citing three unnamed sources claiming familiarity with the matter. Nyara, which is an affiliate of Rosneft, delivered gasoil and gasoline to the Russian state giant, the sources also said.
Barter payments have emerged as the way to avoid sanction penalties as the sanctions only focus on cash, it appears. That is why Rosneft has not yet been sanctioned despite its continued partnership with PDVSA. As Reuters recalls, the latest round of sanctions that extends to non-U.S. business entities stated that oil as payment for loans was acceptable since it did not involve cash that would reach the Venezuelan government.
Exporting crude oil and getting refined products in return is another tactic Venezuela has been using since the United States began sanctioning it. This way, cash is not part of the transaction, but Caracas received fuel that it needs as local refineries struggle to operate at any meaningful rate following years of neglect and underinvestment, as well as the halt of diluent imports from the U.S. amid the sanction conflict.