situation report

Apr 19, 2019 | 16:26 GMT

1 min read

Venezuela, Russia: Rosneft Reportedly Helping PDVSA Avoid U.S. Sanctions

What Happened: Russian energy company Rosneft is helping Venezuela's state-owned oil firm Petroleos de Venezuela (PDVSA) circumvent U.S. sanctions by purchasing Venezuelan oil at a discount, Reuters reported April 18.

Why It Matters: The measure allows PDVSA and the Venezuelan government to maintain a relatively steady flow of revenue under which Rosneft purchases the country's oil before selling it to third parties. Although it remains unclear how much money Caracas is receiving under the scheme, it indicates Moscow's willingness to ensure the survival of the Venezuelan government by enabling it to export more of its crude oil.

Background: The Russian government is a key economic and military partner for Venezuela. However, outside support from Moscow is unlikely to be a long-term solution for the current Venezuelan government as it grapples with internal instability.

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