Venezuela Switches To Euros For Oil

[Steve Gardner]

This hasn't made the kind of impact I would have expected.

A Venezuelan shift away from the USD has been on the cards for some time and the potential damage to the US is not to be underestimated. With Iran already conducting its oil trades in Euros, thus encouraging many of their trading partners to acquire Euros, the US needs to hope other OPEC countries don't follow suit. For as each one abandons the USD, those who persevere with it become increasingly exposed.

Source: Rense

CARACAS (AFP) - Venezuelan state oil giant PDVSA has decided to sign some oil contracts in euros in the face of a plummeting dollar, local media reported, citing officials.

"There are some contracts in euros, contracts for crude, products and spot markets in euros. This is a subject which we are working on," said energy minister and Petroleos de Venezuela (PDVSA) chief, Rafael Ramirez, in an interview with the journal El Universal published Friday.

It remained unclear which oil sales would require payment in euros.

Venezuela, Latin America's leading petroleum producer, has previously backed Iran's proposals for OPEC to abandon the dollar and use the euro for oil pricing. But the Organisation of Petroleum Exporting Countries has rejected the idea, at least in the short-term.

The head of the journal Petroleum World, Elio Ohep, said the shift to euros was "good business" for Venezuela.

"PDVSA always had an interest to negotiate in dollars because the company had refineries in the United States and needed cash but currently with the euro rising, it is taking in more dollars and (Venezuelan) bolivars," he said.

The dollar hit new lows this week against the euro and yen, with the euro at 1.5669 dollars at 21000 GMT on Friday.

Venezuela produces 3.3 million barrels of oil a day, according to official figures, and 2.4 million according to the InternationalEnergy Agency. Half of its production is sold to the United States market.

[Steve Gardner]

Anyone noticing a pattern yet?

It seems that any oil-producing country that doesn't dance to the US's tune is in for a rough ride - particularly if they abandon the USD as the unit of accounting for oil trades!

Source and full article: CPA (an archived Guardian article)

"The war with the US has already begun and they are blocking our purchases of food", Venezuelan Minister Ramón Rodríguez Chacín told viewers on Venezuelan TV on March 12. His statement came at a time when the US is threatening to add Venezuela to its list of "terror-sponsoring" states and some Senators are calling for a full blockade of the country.

The Venezuelan minister, speaking on the program Counter Coup in Synthesis, accused the US of blocking purchases by the government, especially of food, from foreign sources. Venezuela’s economy is essentially oil-based. It imports around 70 percent of its food products. The blocking of food supplies is just one of the methods being used by the US in its attempts to undermine the popularity of the government and destabilise the internal situation there.

Rodríguez told viewers that for some time the US has exercised an informal blockade against Venezuela. The government has also had difficulty acquiring spares for military equipment and other items important to the national interest.