Russia’s Rosneft Still Quietly Exporting Venezuelan Oil Via Sanctions-Free Affiliate

Last week’s announced US sanctions on an arm of Russia’s Rosneft for helping Venezuelan leader Nicolas Maduro circumvent US punitive measures by propping up Venezuela’s oil sector already appear to be failing.

Specifically, the Feb.18 sanctions targeted Rosneft Trading SA, a unit of Russia’s state-owned oil giant Rosneft, as well as company’s executive Didier Casimiro as part of Trump’s heightened pressure campaign on Venezuelan oil, but in fresh reporting Monday Bloomberg finds, “Now, another company affiliated with Moscow-based oil giant Rosneft PJSC that isn’t sanctioned — and thus can trade freely — is ramping up shipments from Venezuela.”

A subsidiary company acquired by Rosneft in 2017 called TNK Trading is greatly increasing its shipments of Venezuelan crude while Rosneft Trading SA hasn’t shipped since January 29, according to data examined by Bloomberg. In the month up to Rosneft Trading being sanctioned, it accounted for up to half of the country’s 850,000+ barrels a day in exports. By all appearances TNK is now busy picking up the slack.

Bloomberg details further:

TNK Trading International SA is scheduled to load 14.3 million barrels of Venezuelan crude in the first two months of 2020, compared with 5 million in all of 2019, according to shipping reports compiled by Bloomberg. That may offset any lost oil revenue for the Maduro administration, underscoring the difficulty of shutting Venezuela’s access to the global market.

This allegation of Russia’s continued assistance to Maduro for sanctions-evading comes after last week a senior Trump administration official accused Rosneft of “actively evading sanctions — engaging in ruses, engaging in deception.”

But Rosneft’s position has been that US sanctions are illegal and that its own operations in Venezuela are commercial in nature, not political. Over the past months the company’s cooperation with state-run PDVSA has been an “open secret”.

Late last week admin officials expressed that President Trump is growing increasingly frustrated at the slow pace and ineffectiveness the current sanctions regimen to block all oil exports. Toward this end, he’s even said to still be considering military options such as a US naval blockade of the coastline. 

The president had frequently vocalized the idea of a naval embargo which would involve multiple warships stationed up and down the South American country’s coastline. But top US military officers were said to have consistently opposed the plan, saying it was impractical and would take away already stretched naval resources busy engaging Iran and China. 

The White House has further been deeply frustrated that the Venezuelan opposition, which failed to deliver results after a months-long standoff last year and with full Washington support that even likely included covert aid via the CIA. 

With the latest Bloomberg report on Russian-assisted sanctions busting sure to cause waves and yet more mounting frustration at the White House, it’s likely that during the next inevitable round of sanctions the US Treasury will cover more bases, going after Rosneft’s other tentacles apparently quietly stepping up with the heavy lifting in terms of crude exports.