According to Reuters, with the restart of US sanctions on Venezuela, its state-owned oil company PDVSA plans to increase the use of USDT as a payment method for its oil exports. Venezuela is the most important oil-producing country in South America, and oil is the lifeline of its economy. Since 2019, Venezuela has been subject to US oil sanctions. Prior to being sanctioned by the United States, Venezuela’s crude oil mainly flowed to refineries along the coast of the Gulf of Mexico in the United States. According to Reuters, PDVSA has been gradually shifting its oil sales to USDT, the world’s largest stablecoin, since last year. Insiders say the return of oil sanctions is accelerating this shift, as it can reduce the risk of frozen sales revenue in foreign bank accounts. Venezuelan Oil Minister Pedro Tellechea said: “According to the provisions of the contract, we have different currencies. And in some contracts, digital currencies may be the preferred payment method.” The US dollar has always been the preferred currency for transactions in the global oil market. Although cryptocurrencies are emerging in some countries, cryptocurrency payments are not frequent. However, in the first quarter of this year, PDVSA has converted many spot oil transactions into contract modes and has requested that half of the prepayment be made in USDT. These transactions are conducted through intermediary institutions to circumvent regulatory inspections, many of which are related to sales to China. As the US Treasury Department permits for oil and gas production are set to expire at the end of May, and the US is considering re-imposing sanctions on Venezuela, the current permit has not been renewed, and oil analysts expect Venezuela’s oil production, exports, and revenue to reach their limits soon. However, Venezuelan Oil Minister Pedro Tellechea denied this claim and stated that the Venezuelan National Oil Company “has strong capabilities in trade” and is prepared to respond commercially to the return of Washington’s sanctions. PDVSA, sanctions, Venezuela
Venezuelan Oil Turns to USDT Transactions to Sidestep US Sanctions