Reliance Industries has agreed to purchase two million barrels of Canadian heavy crude per month, three industry sources said, as a substitute for dwindling Venezuelan supply. The deal, large for Canada, shows how global buyers are scrambling for new sources of heavy oil. Venezuela’s production has collapsed over the last several years, and US sanctions have squeezed its ability to sell oil to international buyers, including Reliance Industries.
The refiner, which operates the largest refining facility in the world, is among several companies winding down purchases from Venezuela as a result of US sanctions.
Reliance Industries’ purchases from Canada will last for six months, two sources said, while a third said it was confirmed for at least the fourth quarter.
With “Venezuela’s collapse in production, (demand) needs to be met by someone”, said a Canadian industry source, who was not authorized to speak publicly.
Bloomberg first reported the sale.