Tether Payments Prohibited For Use In Efforts To Avoid Oil Sanctions

Key Points:

• Venezuela’s PDVSA turns to cryptocurrencies, notably Tether payments, to bypass renewed U.S. sanctions targeting its oil sector.
• PDVSA is shifting to a contract model that requires prepayment in USDT for exported cargo and mandates that new customers hold cryptocurrency in digital wallets.
• Despite sanctions, PDVSA’s oil exports have surged under Minister Tellechea’s leadership.

Venezuela’s state-run oil company, PDVSA, is reportedly ramping up its usage of cryptocurrencies for crude oil and fuel exports in the face of renewed U.S. sanctions. This development follows an exclusive report by Reuters, revealing PDVSA’s plans to lean into Tether payments amidst tightening restrictions.

Tether Payments Emerge as Key Tool in Venezuela’s Oil Export Strategy

The move comes as the United States renews sanctions on Venezuela, targeting its oil sector. The U.S. Treasury Department’s decision not to renew a general license, expiring on May 31, complicates transactions with PDVSA. Companies will now require individual U.S. authorizations to engage in business with Venezuela, potentially impeding the country’s efforts to boost oil output and exports.

Sources suggest PDVSA’s pivot towards Tether payments as a means to navigate around freezing of funds in foreign accounts due to sanctions. PDVSA is allegedly restructuring its oil deals, shifting towards a contract model requiring prepayment in USDT for exported cargo.

Tether, on its part, reaffirms its commitment to compliance with sanctions, stating its dedication to promptly freezing payments linked to Office of Foreign Assets Control-sanctioned entities, as reported by Cointelegraph.

PDVSA’s Oil Exports Surge Despite Sanctions

Additionally, new customers seeking oil transactions are mandated to hold cryptocurrency in digital wallets, a requirement even applied retroactively to existing contracts.

Despite facing significant hurdles, PDVSA’s oil exports have surged under the leadership of Tellechea, Venezuela’s oil minister post-scandal. Encouraged by U.S. licenses permitting sales, exports hit a four-year high of 900,000 barrels per day in March.