According to a report quoted by Reuters from unnamed sources, due to the recent decision by the United States to reimpose sanctions on Venezuela, the country’s state-owned oil company, PDVSA, is attempting to add Tether’s stablecoin, USDT, as a payment option for crude oil and fuel oil exports.
Last week, Reuters reported that due to Venezuelan President Nicolas Maduro’s failure to fulfill his election promises, the Biden administration will no longer renew a license aimed at easing sanctions on Venezuelan oil. According to the Reuters report, the U.S. Treasury Department has requested PDVSA’s customers and suppliers to cease transactions under the general license by May 31.
Insiders told Reuters that PDVSA’s move to use USDT is aimed at minimizing the risk of frozen profits from oil sales in overseas bank accounts due to U.S. sanctions. It is reported that the company has gradually shifted the payment method for oil sales to USDT since last year.
By the end of the first quarter, PDVSA had transferred many non-reciprocal spot oil transactions to contracts that require prepayment in USDT. The Venezuelan oil company also requires new customers wishing to engage in oil transactions to hold cryptocurrencies in digital wallets.
A trader told Reuters that because cryptocurrencies do not meet the requirements of any trade compliance department in oil trading, PDVSA and its trading partners rely on cooperation with intermediaries. However, this may result in a lower profit margin for the company.
According to a report by Reuters in January 2023, when the United States relaxes sanctions, Venezuela exports nearly 700,000 barrels of oil per day, with 65% going to China and 19% to the United States.
