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Chevron is prepared to trade Venezuelan oil in place of banned Russian oil imports if the US eases its sanctions on Caracas, Reuters reported.
The release of more Venezuelan oil would help offset oil losses in wake of the Russia ban, put in place on March 8 over its invasion of Ukraine. However, the move is dependent on fraught political talks with the South American nation.
Still, sources told Reuters that Chevron has been preparing to expand its four ventures with Venezuela's national oil company PDVSA.
It has assembled a trading team to market oil from the South American nation, asked the US government for a license to have greater control over the ventures, and is starting to arrange Venezuelan visas for its employees from Aruba, Reuters reported.
Chevron did not immediately respond to Insider's request for comment, made outside its normal working hours.
Sanctions were imposed on Venezuela by the Trump administration in 2019 to pressure Venezuelan President Nicolas Maduro to leave power. Since then, the country has allied itself closely with Russia.
Seeking to break the ice and develop alternatives to Russian oil, the US and Venezuela held their first high-level bilateral talks in years on March 5 in the Venezuelan capital of Caracas.
Crude oil prices have surged as a result of the supply crunch from sanctions against Russia, jumping nearly 20% on March 7 to almost $140 a barrel for the first time in nearly 14 years. The price appears to now be heading towards a weekly decline of 4%.
Chevron's moves in Venezuela could boost crude supplies to offset the loss. Before US sanctions, its joint ventures with PDVSA produced around 200,000 barrels of oil per day, according to Reuters. They now produce 140,000 barrels per day, Bloomberg reported.
"Since Venezuelan barrels were banned in the United States in 2019, and Colombia and Mexico reduced key exports to the United States, Russian barrels have been feeding the Gulf refiners," one person involved in the bilateral talks told Reuters.
Thawing relations between Washington and Caracas in recent weeks appear to have had some impact.
US officials are seeking the release of more jailed Americans in Venezuela, after Maduro released two last week, Reuters reported. Washington also wants more guarantees of free elections and the resumption of talks with Venezuela's opposition, the agency also reported.
During the talks in early March, Maduro had, in turn, pushed for a total lift on sanctions on its oil exports, sanctions on him and other government officials, as well as a return to government control of Citgo Petroleum, a US subsidiary of PDVSA.
Even if sanctions are relaxed, challenges still abound for the Venezuelan oil industry. Years of government mismanagement mean the industry is nowhere near its oil-producing boom days in the 1990s when it produced 3.2 million barrels of oil a day. It now averages around 800,000 barrels a day.
