Russia-Ukraine crisis: India hopes to get back its dues from Venezuela

The Russia-Ukraine conflict and western sanctions that followed has silver lining for India’s efforts to release payments for its public sector enterprises which are stuck in other sanction hit geographies.

Hoping for Western flexibility in dealing with sanctions elsewhere when the entire focus is on Russia, India has renewed its diplomatic negotiations with the US to get dues released for its companies in sanction hit Venezuela.

Sources indicated that the US side may show flexibility in its dealings with India on Venezuela that will allow OVL, the overseas arm of country’s largest oil and gas explorer ONGC, to get back its $420 million of dues that is stuck due to sanctions for the last few years.

On Tuesday (March 8, 2022), the Biden administration banned imports of Russia oil, gas and coal. The US was importing from Russia to replace the heavy sour crude from the South American nation Venezuela. Imports from Venezuela were stopped after sanctions were imposed on that country by the US.

Timeline: India stopped buying from Venezuela post US sanctions

In 2017, the former US President Donald Trump had imposed unilateral sanctions on two major OPEC members – Venezuela and Iran.

The sanctions which were imposed on Venezuela were in an attempt to remove President Nicolas Maduro as the leader of that country.

And the sanctions on Iran were imposed to stop that country’s nuclear programme.

While India had drastically cut down its imports of the Venezuelan oil, in 2019, it stopped buying the Iranian oil.

US & Venezuela talks

Top US officials were in the capital city of Venezuela, Caracas to meet the leader of that country. The meeting lasted almost two hours. There is no clarity on what was actually discussed during the meeting.

Earlier this week, the White House in a media briefing in Washington DC had said that the visit to Caracas was to discuss many issues, including “energy security’’, and also cases related to nine US citizens who are jailed in that country.

According to reports, the US delegation was led by Juan Gonzalez, who is the top White House Latin America adviser accompanied by Ambassador James Story.

The trip to Caracas comes as Washington seeks to isolate Russia over its invasion of Ukraine. The US had broken off with the South American nation in 2019, however, President Maduro has assured the Russian President Vladimir Putin of his strong support following the invasion of Ukraine.

US sanctions imposed in 2019?

In a bid to remove Maduro from office the former US President Trump had imposed several sanctions including a ban on preventing that country from trading its crude oil – this accounted for almost 96 percent of the country’s revenues, on the US market.

So far the US has refused to deal with the Maduro government and has been treating the opposition leader Juan Guaido as the legitimate president of that country and is one of the 60 countries to recognize him as leader.

In February 2022, the US had signaled that it was willing to review its sanctions policy, only if the talks between Maduro’s government and the opposition moved forward.

India is the world’s third biggest oil importer and consumer, and wants to diversify its oil imports which would enable it to buy cheaper oil to bring down its import bill and to help save forex.

Sanctions on from Iran and Venezuela have blocked up to three million barrels per day (bpd), or 3 percent of world supply.

India’s request to recover its dues from Venezuela through the US is being handled by the Department of State and Indian Embassy in the US and any transfer from that country would have to be through US approval.