The President of Spain, Pedro Sánchez, asked citizens to prepare for “any scenario” in the face of the return of summer and the Government is already designing different contingency plans related to energy supply, the great concern in Europe in this time for fall and winter.
The last barrel of Venezuelan oil -of great quality, by the way- arrived in Spain in October 2020, according to data provided by the Strategic Reserves Corporation (Cores). The sanctions of the United States against the Maduro regime made Spain disconnect from the Caribbean country’s crude oil and seek alternative markets, essentially the North American, Mexican and Nigerian markets. This put an end to a historical and, as we say, quality supplier, which particularly affected Repsol due to its business with the state-owned company PDVSA.
But the war in Ukraine has radically changed the scenario in the medium and long term both in Europe and in the US – Biden’s trip to Saudi Arabia and the lukewarmness about Khashoggi’s murder is an example that everything is changing. A conflict, in Ukraine, that is supposed to be long (government sources are already talking about a decade) and from which, the Executive fears, greater economic consequences will result. In Moncloa they are already working with the possibility (“very likely”) that Putin cut off the shipment of gas to Europe through the German pipe. Faced with this situation, strategies are being reinvented and the Spanish government will not be oblivious to these movements, the coalition Executive insists.
The strategy under way is to recover the shipment of crude oil from Venezuela to Spain. Repsol will be there. The decision has been adopted after the trip, last June, of a US delegation to Caracas to walk towards the reestablishment of commercial relations in energy matters. In Madrid they closely followed that visit endorsed by the White House. In this way, in the absence of some fringes to close, Spain is already prepared to receive Venezuelan oil again after almost twenty-two months with the supply interrupted by sanctions, which are going to be softened by the crisis. Repsol already has its teams working on this budding operation.
Recovering Venezuelan oil imports to Spain is a movement with a powerful geopolitical background. The Sánchez government came to recognize Juan Guaidó as the alleged “president in charge” of Venezuela, but progress has been nil. The Spanish Executive, which has always played an important role in the Caribbean country, is aware of this. The war in Ukraine and the uncertainty force a change of strategy and this shift in the economic relationship with Caracas.
The great beneficiary of this change in position would be Repsol. The Spanish oil company owns 40% in the Petroquiriquire joint venture together with the Venezuelan Petroleum Corporation (CVP) and PDVSA Social, the two public entities with which the elite close to the Maduro government benefits from the extraction of crude oil, and also gas, from the company chaired by Antonio Brufau. It also owns another 50% together with the Italian Eni in the Cardón IV company, which is dedicated solely to the production and sale of gas in Venezuela.
Venezuela has been one of the main suppliers of oil to Spain from America, with the permission of Mexico, at the head. In 2019 there was an upturn in the purchase of oil from the country governed by Maduro, with almost 2.3 million tons, a figure that had not been known for four years before and that is very similar to what was purchased to Russia last year. Even in the course of the pandemic and with activity falling to a minimum, 1.4 million tons were brought from Venezuela, with four blank months. The sanctions set by the US at the time of Trump cut short the commercial relationship a year and a half ago, until now Biden has opened the door to resume the situation, in exchange for taking the Russian supply off the market. Spain will be involved in this turn.