U.S. sanctions second Rosneft subsidiary for shipping Venezuelan crude

The U.S. sanctioned a second subsidiary of Russia’s biggest oil producer. The Rosneft CEO expressed his company’s interest in acquiring BPCL. A three-year pact between OPEC and Russia ended in acrimony on Friday. The measure explicitly prohibited U.S. companies from dealing with Rosneft Trading after a three-month wind-down period.

Rosneft PJSC allegedly supporting Venezuelan leader Nicolas Maduro. US President Donald Trump on Tuesday imposed sanctions on the trading arm. Russia’s largest oil producer Rosneft posted a 45 per cent growth in fourth quarter. TNK Trading International SA, a Geneva-based Rosneft subsidiary, was sanctioned for helping transport Venezuelan crude oil.

Rosneft said the investments would be used for projects such as restricting CO2 emissions. In February, Bloomberg News reported that TNK was ramping up planned shipments from Venezuela. Russian oil and gas giant Rosneft signed a contract with India’s largest fuel retailer.

Sanctions were brought against Rosneft Trading SA. Rosneft reported its financial results a day after the United States imposed sanctions on its Geneva-based Rosneft Trading SA unit. The top buyer of Venezuelan crude last year, for helping sell the commodity that bankrolls the Maduro regime.

Russian oil major Rosneft has been the largest intermediary of Venezuelan oil. Rosneft said fourth-quarter net profit was 158 billion roubles ($2.4 billion), compared with 109 billion roubles in the year-earlier period. Russian largest oil producer Rosneft has pledged to invest around $5 billion.

Bloomberg News reported that TNK was ramping up planned shipments from Venezuela. The plans were revealed after BP, owner of 19.75 per cent. After sanctions were brought against Rosneft Trading SA, the top buyer of Venezuelan crude last year.

The results were negatively affected by contamination at the Druzhba oil pipeline last year. Rosneft, pledged deep cuts to its carbon emissions by 2050. Rosneft Oil Company and Indian Oil signed a contract to supply up to 2 MT. Washington’s move this week to sanction a trading unit of Russian.

It helping sell the commodity that bankrolls the Maduro regime. No mention was made of the U.S. sanctions or Venezuela operations. Rosneft itself is not subject to the sanctions. The Moscow-based parent company has said the U.S. sanctions are illegal. The company accounts for over 40 per cent of oil production in Russia.

The operations in Venezuela are commercial, not political, and that other international companies, including American ones. Reliance Industries Ltd, a key buyer of Venezuelan oil, said it was assessing the impact of the latest US sanctions. Investors were cheered as the company said that strong results would allow it to increase the final dividend.

Rosneft’s spokesman, Mikhail Leontiyev says “All oil volumes, which were removed as the result of numerous OPEC+ deal extensions, were fully and quite quickly replaced”.

The added sanctions come as a price war between Russia and Saudi Arabia has sent oil prices to the lowest since 2016. Geneva-based trading unit of Rosneft that supplies oil to the private refiner. The 2019 dividend yield based on the average share price will be at around 8 per cent, Rosneft said in the statement.

Oil headed for the biggest weekly decline since 2008 after President Donald Trump said the U.S. would restrict travel from Europe. Its shares increased 1.7 per cent by 0850 GMT, outperforming a wider index which was up 0.9 per cent. Rosneft said the investments would be used for projects such as restricting CO2 emissions.

Next 30 days in an attempt to contain the coronavirus, pummeling fuel demand. This would be the first such contract signed by a state-owned oil marketing company with Rosneft. Rosneft also said its net debt and trading liabilities declined by 174 billion roubles in 2019.

The price war will cut Venezuela’s oil revenue by $6 billion this year, according to consulting firm Ecoanalytica. Its net debt was 1.4 times EBITDA at the end of the 2019. The company also said it wants to cuts greenhouse gas emissions by 8 million tonnes by 2022.

Estimates 2019 oil revenue was $13.9 billion. US President Donald Trump on Tuesday imposed sanctions on the trading arm of Russian oil major Rosneft. The introduction of sanctions on Rosneft’s subsidiary is negative for sentiment. Russia is world’s fourth-largest greenhouse gas emitter after China, the United States and India.

Traders buy Venezuelan crude at a discount of about $20 to international benchmarks due to the complications of buying sanctioned oil. Rosneft Trading SA trades mostly crude purchased from third-party vendors. President Vladimir Putin has said Russia will stick to its goals as part of global efforts on tackling climate change.

A lecturer in energy economics at Rice University’s Baker Institute for Public Policy and an expert on Venezuela’s oil industry. Washington targeted Moscow over its backing of Venezuelan President Nicolas Maduro’s government. The U.S. told Rosneft Trading’s counterparties to wind down their transactions with the unit by May 20.

U.S. President Donald Trump began escalating Venezuela sanctions in 2019 when he endorsed opposition leader Juan Guaido. The signing took place during the visit of Igor Sechin, Chief Executive Officer (CEO) of Rosneft to New Delhi. The U.S. government on Tuesday blacklisted Rosneft Trading.

The measures accelerated an ongoing collapse in an oil industry already suffering from years of corruption and mismanagement. Reliance will continue its direct communications with the US Government. The Kremlin on Tuesday said the new U.S. sanctions were illegal and would not affect Moscow’s ties.

Trump’s State of the Union speech earlier this month was attended by Guaido. But OFAC’s measures could dissuade Rosneft Trading’s other customers from dealing with the unit. RTSA sanctions are both compliant with US sanctions and consistent with US policies.

President promised then to break Maduro’s “grip on tyranny”. A deal between OPEC and other producers to cut oil production was not in the interests of Russia. The Rosneft CEO expressed his company’s interest in acquiring BPCL. A three-year pact between OPEC and Russia ended in acrimony on Friday.

Even as the U.S. sanctioned Rosneft Trading and TNK, it has refrained from sanctioning the parent company. According to Rosneft, a separate topic of discussion was held regarding the company. Whether it’s for Rosneft Trading in this regards, now, or for companies that deal with Rosneft Trading throughout the world.

The deal, first introduced in 2017, had been extended several times. It is still effective until March 31. A move that’s kept at bay disruptions to the global oil business. In order to negotiate the terms of Indian companies’ entering Vostok Oil in the shortest time possible the parties.

Rosneft took control of TNK Trading in December 2017. Company agreed to create a regular working group of representatives of Russian and Indian companies. Already, global commodity trader Trafigura Group has said it would comply with U.S. sanctions on Rosneft Trading.

Rosneft’s disclosures in its International Financial Reporting Standards filing last year. Fedun had expected the deal would restore oil prices to above $60 per barrel by mid-March. The sanction on Rosneft Trading also comes less than a month after OFAC renewed a license.

Vostok Oil’s competitive advantage lies in its proximity to the Northern Sea Route, a unique transport corridor. PDVSA recently resumed direct crude exports. The U.S. will likely continue to try to scare non Western companies. Both TNK and Rosneft Trading are registered in Geneva at the same address, the company’s filings show.

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