Venezuela has agreed to swap millions of barrels of crude for corn and water trucks under an oil-for-food agreement reached between Venezuelan authorities and a Mexican company as part of efforts to secure imports in the midst of increasing US restrictions, Reuters reported.
The private Mexican company, Libre Abordo, which has had no expertise in the oil business, has so far been granted 6.2 million barrels of Venezuelan crude oil to further resell the commodity to international oil clients. The company has two more oil and fuel deliveries set to be produced in the coming days, the news agency bared.
Libre Abordo SA has emerged as a major lifter of Venezuela's crude stockpiles as the government-controlled oil producer Petróleos de Venezuela, S.A. has seen its portfolio of buyers shrink as a result of economic sanctions whose objective is to oust socialist leader, Nicolas Maduro.
In a statement sent to Reuters, Libre Abordo disclosed that it had signed a deal in 2019 to deliver Mexican corn and water trucks to Venezuela in exchange for supplies of crude and that the agreement was still in effect.
Executives of Libre Abordo said the company had sought legal advice with regards the deal and had been advised there was no violation of the sanctions imposed by the US as there was no money involved because of the commodity was received to cushion food aid.
Received oil shipment, as stipulated in the contract, are being resold and the buyers take possession of the deliveries at PDVSA's piers with Libre Abordo not having any knowledge of the final destination or use, company officials stressed.
Mired in hyper-inflation for many years, poverty and economic turmoil, Venezuela has struggled to pay for imports of just about everything - from basic necessities to medical supplies. Millions of Venezuelans have left the country in the midst of growing hardship. Libre Abordo did not provide the identity of the law firm that provided the legal advice but it released a copy of the document for Reuters to evaluate.
Governments around the globe have called on the US, an avid detractor of Maduro, to ensure that economic restrictions do not cause the nation to end up in a real humanitarian calamity. As Washington puts more pressure on the Venezuelan president, the US has supported an interim government led by the opposition leader, Juan Guaido.
Several food suppliers to Venezuela were restricted by the Mexican government in 2018 over accusations of over-pricing and poor quality of the commodities being sold. The companies were slapped with fines and ordered to halt exports to Venezuela.
