Reliance may apply brakes on Venezuelan oil purchases

Reliance Industries Ltd has halted purchases of Venezuelan crude oil after US President Donald Trump authorized a 25% tariff on countries buying oil from the the South American country, Bloomberg reported, citing people aware of the developments.

Trump on Monday issued an order levying a 25% tariff on any nation purchasing oil and gas from Venezuela, worsening a row with the Latin American nation over immigration. The US is looking to cut off a key source of revenue Venezuelan President Nicolás Maduro, while piling pressure on China, a key customer of Venezuelan crude. The US is also a major buyer of Venezuelan oil.

Reliance is expected to take delivery of a cargo of Merey crude that’s currently en route from Venezuela, but additional buying has been put on hold, Bloomberg reported.

The Indian oil refiner had secured waivers from the US last year to resume importing crude from Venezuela.

Reliance has taken 6.5 million barrels since the start of the year, the Bloomberg report said, citing data intelligence platform Kpler.

Trump’s Monday order will target nations importing Venezuelan oil with secondary tariffs, with effect from 2 April.

Last year, some Indian refiners opted to acquire Venezuelan oil through traders rather than directly from Venezuela, primarily because Russian crude has been more affordable and readily available. Reliance Industries is also a purchaser of Russian oil.

In Venezuela, China remains the top purchaser of crude oil, accounting for over 40% of its oil exports in February.

Despite potential temporary halts by China’s private refiners under increased scrutiny, the trade in sanctioned Venezuelan oil is expected to continue unabated.

A spokesperson for Reliance did not immediately respond to an email seeking comments.