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US sanctions: Venezuela open to barter trade with India to boost oil sales; terms American action as financial persecution

Reuters
The international benchmark for crude oil prices is at a near 3-month high and set for a 4.5-percent gain for the week.

New Delhi: Venezuela is open to barter-like payments from India to boost oil sales to the world's third-biggest oil consumer, the South American country's oil minister Manuel Quevedo said on Monday.

Venezuela buys a slew of products including medicines from India, and it is looking for alternative payment mechanisms after application of the latest stringent US sanctions.

The administration of US President Donald Trump has imposed sweeping sanctions on Venezuelan state-owned oil firm PDVSA, aimed at severely curbing the OPEC member's crude exports to the United States to pressure socialist President Nicolas Maduro to step down.

"The relationships with India will continue, the trade will continue and we will simply expand all the trade and relationship," Quevedo told reporters on the sidelines of Petrotech conference, without giving any further details on how a barter mechanism with India would work.

Venezuela's oil production has dwindled in the last two decades, from more than 3 million barrels per day (bpd) at the beginning of the century to between 1.2 million and 1.4 million bpd by late 2018. Most of the crude oil it produces now is heavy or extra heavy.

Venezuela's oil output is now at 1.57 million bpd, Quevedo said.

The Venezuelan oil minister, who now holds the rotating presidency of the Organisation of the Petroleum Exporting Countries (OPEC), said it was important to listen to all the consuming countries that represent oil demand to maintain the balance of demand and supply in the markets.

"Inventory levels, demand, supply are the elements taken into account while trying to maintain the balance the global industry needs," Quevedo said.

Unilateral sanctions by the United States have reduced PDVSA's oil output and caused a loss of about $20 billion to its oil revenue-dependent economy, he said.

"US exercises kidnapping of resources around the world ... It is financial persecution. Now they want to steal Citgo Petroleum from Venezuela," he said.

Citgo Petroleum Corp is a unit of PDVSA and Venezuela's top foreign asset. Citgo operates three U.S. refineries that supply about 4 percent of total US fuel production, and it is PDVSA's largest US customer for its oil exports.

Following the US decision to impose sanctions on Venezuela's oil industry, both sides have engaged in aggressive moves for control of Citgo, which has roots in the United States dating back 100 years, but has been owned by Venezuela's state-owned Petroleos de Venezuela, or PDVSA, for three decades.

Sanctions have forced Citgo and other US refiners to seek crude oil supplies from other nations.

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