Below is our translation of an article from the Russian site infox.ru with commentary and annotations in [square brackets] by Vince Dhimos.
You may be mystified by this part of the translation:
“Rosneft will continue to supply petroleum products to the state-owned company PDVSA, despite the sanctions imposed on our country.”
The reason why a Russian oil company would be supplying petroleum products to a Venezuelan oil company is that Venezuela needs naphtha to thin its heavy viscous oil to make it pumpable. Otherwise it could not be further transported and/or refined for export. Until now Venezuela had acquired this naphtha from the Gulf coast in the US, but since the US slapped sanctions on the country in a cynical attempt to hurt the people, it is refusing to deal with the US, which will now lose this income. Russia, China, Europe and others are making sanctions a thing of the past. Consider the special purpose vehicle INSTEX, a new development in Europe designed to bypass the US-controlled SWIFT system that has been used to enforce US sanctions. This new system works just like SWIFT but is beyond US control and will be used to transfer payments to sanctioned countries like Iran, making it difficult for the US even to know what amounts of money – in euros, yuan, roubles, or other non-dollar currencies – have been transferred and from whom to whom.
Now we find that Russia (along with China) is creating a system of oil trade with Venezuela that will also bypass sanctions. Trump is a dinosaur still living in a monopolar world that is disappearing like an ice floe under a polar bear’s feet with the spring thaw. He may not find out until it is too late, and once he does, he will blame someone else and his faithful will bleat about 3-D chess and once again proclaim him a master, even as the repo man tows away the new car.
If China and Russia succeed in wresting control of Venezuelan oil from the Yanquis, some of the unexpected consequences for Trump that normal people can easily foresee will include major losses for the refineries in the Gulf that were designed specifically to process the viscous Venezuelan crude, the complete loss of oil from Venezuela for the US, which will now go to China and Russia, and a likely effect on oil prices, which will rise at first due to the initial scarcity of crude in the world and then taper off as the Russians and Chinese begin to sell or consume the Venezuelan crude. The US based Venezuelan companies will no longer receive oil for sale in the US, also impacting gasoline prices at the pump. This is typical of the brash approach of the Trump administration to take steps without stopping to consider the consequences. Like the tariffs hastily slapped on the Chinese that led to counter-tariffs on US soybeans and pork, leaving US farmers in a precarious position from which there is no exit except subsidies paid for by the taxpayer, or his thoughtless support for shale oil and gas extracted by the extravagantly expensive hydraulic fracturing method, leaving little or no profit margin from the sale of the product. In fact, it all is reminiscent of how CEO Trump had always done business, thoughtlessly and callously investing other people’s money in projects without doing due research diligence, and when they didn’t pan out, then declaring bankruptcy and letting someone else pay the bills. This is what psychologists call a behaviour pattern, which allows people to be predicted and from which there is generally no remedy for the patient addicted to the behaviour. Sad for the patient and his family and acquaintances but potentially disastrous for a nation in thrall to such a personality.
We need to recall that the Chinese and Russians had already concluded contracts with Venezuela that could have been expected to pull the economy out of its crisis. The Trump administration must have known this when it engineered the attempted coup and encouraged its puppet Guaidó to make his grab for power. This is the signature style of US-led coups and interventions. It is reminiscent of how Trump quickly launched his Tomahawk strike on the Syrian city of Douma even though there was as yet no clear determination that an attack had even actually occurred or who was behind it, and even though the OPCW already had a delegation in Syria prepared to enter the city the day before the attack to make these determinations. The motive clearly was not to punish Assad for his unproved use of chemical weapons but rather to gain political points for Trump and contribute in some small way toward a possible regime change – but only to please US allies Israel and Saudi Arabia and US Neocons hysterically bleating for war.
Maduro and Rosneft outwit Trump
10 Feb 2019
Russia was able to circumvent the financial and trade restrictions that were imposed against Venezuela by the United States due to the ongoing political opposition in the country. Russian banks will deposit all the proceeds from the sale of oil, and Russian oil companies will sell it.
Rosneft will continue to supply petroleum products [see above] to the state-owned company PDVSA, despite the sanctions imposed on our country. In turn, Russia will receive Venezuelan oil. US sanctions against the regime of Nicolas Maduro were aimed at depriving him of financial support. The main, if not the only, income to the country comes from the oil state company PDVSA, whose accounts and US assets have been blocked. The amount of blocked funds is approximately $ 7 billion.
At the same time, American companies have the opportunity to continue to buy oil in the country, but all the profits from these operations have been accumulated in a blocked account. Restricted access to this account was open only the chairman of the national assembly of Venezuela, Juan Guaidó, whom the United States recognized as the transition president of the country. We note that Rosneft alone has 5 joint ventures in Venezuela and PDVSA owns more than 50% of each. In the event the US scheme had gone into effect, then analysts say the financial and operational flexibility of all companies was subjected to considerable checks. But, as we see, Rosneft has removed the oil turnover from US control.
This is not all good news for Nicolas Maduro and bad news for his opponent Juan Guaidó. PDVSA transferred the accounts of all its joint ventures to the Russian Gazprombank. This is reported by Reuters, citing its sources. Venezuela has joint ventures not only with Russia, but also with China, which has invested tens of billions of dollars in the country's economy and oil production. PDVSA demanded that all of its partners, Equinor, Chevron and Total and others, decide whether to continue cooperating in the development of the Orinoco oil basin. And, if they should continue, then the proceeds must be deposited in the accounts at Gazprombank. It should be noted that Gazprombank itself does not risk falling under US sanctions, as it has already been under them since the summer of 2014.
For the regime of Nicolás Maduro, US sanctions have indeed become a real problem. In fact, because of them, he could not sell oil on the market, but only accumulate it in oil storage tanks. It is unlikely that Maduro himself would desire to sell oil, since each barrel sold would go to the support of his political opponents. But now, as we see, a solution has been found. Note that this scheme, while allowing Venezuela to temporarily duck US sanctions, will undoubtedly bring on the wrath of the American punitive machine. However, in this case it is not clear what remedies they could undertake. Certainly the United States will not dare to attack Russian tankers. And even the Americans cannot afford to impose sanctions twice on Gazprombank.
Recall that more and more countries recognize the speaker of the National Assembly of Venezuela, Juan Guaidó, as the “transition president” of the country. Maduro, however, meanwhile, confidently wields the levers of power in the country. And, most importantly, he has not let oil production escape his control, and the Venezuelan military has not yet begun to go over to the side of the opposition. All of this allows the situation in the country to remain in limbo indefinitely.