Page 5 - EurOil Week 21 2022

EurOil COMMENTARY EurOil

her Twitter account trumpeting that Washing- crude oil markets.
ton had authorised US and European compa- US miscalculations
nies to “negotiate and restart operations” in her Unfortunately, though, they may also indicate
country.) that the Biden administration does not have a
Meanwhile, reports of a possible softening very deep understanding of world crude oil mar-
in the sanctions regime have drawn a frosty kets – or at least, to give those involved the bene-
response from some US politicians. For exam- fit of the doubt, is not bothering to communicate
ple, Bob Menendez, the New Jersey Democrat its understanding and intentions very clearly.
who serves as chairman of the Senate Foreign One of the more interesting statements
Relations Committee, issued a statement last made by Bloomberg source last week was that
week criticising the idea of taking Malpi- Washington was taking this step partly because
ca-Flores off the list of sanctioned individuals. it wanted Eni and Repsol, the only two foreign
Any plan that relies on giving Maduro “a hand- companies still operating in Venezuela, to be able
ful of undeserved handouts” in the hope that to deliver more crude to the European market.
he will negotiate with his political opponents With that barrier lifted, the source said, Europe
“is a strategy destined to fail,” the statement should have an easier time covering demand and
declared overcoming the supply disruptions resulting
Menendez later reiterated this sentiment, tell- from the interruptions in Russian crude deliv-
ing reporters: “Removing Flores from the list of eries, he said.
sanctioned people is obviously a gift to Maduro.” According to Bloomberg’s report, this assis-
For his part, John Barrasso, the top-ranking tance for Europe may come at the expense of
Republican on the Senate Energy and Natural other parties. One of the multiple sources cited
Resources Committee, said he did not want by the news agency said that Eni and Repsol were
to see the US government striking deals with working with US authorities to divert cargoes
authoritarian regimes such as the one headed of Venezuelan crude heading for China to the
by Maduro. He also urged Washington to make European market.
the US oil and gas industry a higher priority than
PdVSA. “Our experience buying Russian energy What can Venezuela do?
should have taught President Biden that buying It’s not clear how much impact such moves
energy from tyrants is a dangerous proposition are expected to have – or, indeed, what kind of
... Funding despots isn’t in the national interest; impact.
supporting American energy is,” he said in a Prior to the invasion of Ukraine in late Febru-
statement. ary, European countries were importing around
As of press time, the Biden administration has 2.3mn barrels per day of crude from Russia, and
not made any official statements about its stance delivery volumes were reported to be down by
on Venezuela. However, the events reported about 20% as of mid-April. That would put them
above appear to signal that there is a US policy at around 1.84mn bpd – and that’s a figure that
shift in the works. Moreover, they also seem to Venezuela has no hope of matching any time
indicate that one of the considerations driving soon.
this shift is Washington’s desire to stabilise world The South American country is currently

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