Venezuela’s recent oil shipments to Syria may provoke sanctions
‘Might be intermediaries involved’
BUENOS AIRES | Venezuela recently shipped fuel to a Syrian firm despite U.S. government sanctions, in moves that could open the South American nation to punitive U.S. measures, according to energy analysts.
Analysts say they have no doubt that the state-owned firm, Petroleum Venezuela, dealt with Syria’s state oil company, Sytrol.
The U.S. Treasury Department placed Sytrol on a sanctions blacklist last summer, along with the Syrian Petroleum Corp. and the Syrian Company for Oil Transport (SCOT), which operates major oil export terminals.
“Any dealings by foreign firms with these blacklisted companies would technically be sanctionable,” said Lejla Alic, an economist at the U.S. Energy Information Agency.
Although shipping oil to Syria for humanitarian reasons is not subject to sanctions, the Venezuelan oil company would have dealt with the blacklisted firms, analysts said.
“There might be intermediaries involved in the shipments, but the Syrian state had to have received them,” said Pedro Burelli, a former member of the board of directors of the state firm, known by its Spanish initials PDVSA.
“There is simply nobody on the private side who has logistics to do so.”
A shipping consultant who asked not to be identified because he does business with PDVSA agreed.
“The history of diesel going into Syria has always been through Sytrol,” he said.
“It’s possible they could have put some company in business to receive these shipments, but I’m sure it ended up with Sytrol and that’s how it got put into the system.”
Energy analysts for the U.S. government also agreed that the shipments were likely handled by Sytrol.
Venezuelan Oil Minister Rafael Ramirez has confirmed media reports that PDVSA sent two shipments of fuel to Damascus after Western sanctions were imposed on the Syrian regime, which is accused of killing thousands of protesters against the government.
“We’ve sent Syria two cargoes of diesel [fuel], and shipments will continue as they are needed,” Mr. Ramirez said. “We have a high degree of friendship and cooperation with Syria.”
One cargo of diesel fuel with an estimated value of $ 50 million left Venezuela in February on the tanker Negra Hipolita. It was bound for the Syrian port of Banias. A shipment was sent in November.
On March 5, a Venezuelan congressman, Adel El Zabayar of Mr. Chavez’s party, told reporters that PDVSA is planning a third shipment.
Analysts also say Washington could retaliate against Venezuela — which also owns the Texas-based company Citgo and supplies crude oil to U.S. Gulf Coast refineries — by restricting PDVSA’S access to American financial institutions.
That, however, could have a negative impact on Citgo and ultimately spell trouble at the gas pumps, where the price of a gallon of gas is in the $4 range.
“Venezuela represents 8 percent of U.S. imports, so any action against it could drive up gas prices,” said Boris Segura, a Latin American analyst for Nomura Securities.
A Treasury Department representative said the department does not comment on possible enforcement actions.
Last year, Washington slapped partial sanctions on PDVSA for supplying fuel products to Iran. Those measures did not restrict Venezuelan oil exports to the U.S. or affect Citgo in any way.
“[President Hugo] Chavez does not fear sanctions and, as a matter of fact, might actually be tempting them for his own gain,” said Mr. Burelli.
Mr. Chavez, who is facing a lifethreatening recurrence of cancer, is in a tough political presidential re-election campaign against an increasingly popular opponent, Henrique Capriles. The election is slated for October.
“He will use any position Washington takes against him to make it seem like he isn’t fighting anybody but the U.S., and that the [domestic political] opposition is just a lackey,” Mr. Burelli said.