A private Mexican firm has received several million barrels of crude from Venezuela's PDVSA in exchange for corn and water, Reuters reports, citing documents from the company, named Libre?

A private Mexican firm has received several million barrels of crude from Venezuela's PDVSA in exchange for corn and water, Reuters reports, citing documents from the company, named Libre Abordo.

So far, Libre Abordo has received 6.2 million barrels of Venezuelan crude, to resell on international markets and has another two cargoes of crude oil and fuel, to be loaded this month, according to PDVSA documents Reuters has seen.

The contract between the Mexican firm and Caracas was signed last year, Libre Abordo told Reuters, and was still in effect. Since there were no cash payments involved in the relationship, there was no danger of violating U.S. sanctions against Venezuela.

Venezuela has been grappling with hyperinflation and shortages of basic products as a result of the U.S. sanctions levied on the Maduro government, which Washington has declared illegitimate. Oil is the country's biggest export commodity and U.S. sanctions have crippled this revenue stream, forcing the government to seek other ways to bring in food and, apparently, water.

Yet Venezuela's oil industry is far from dead. PDVSA operates oil fields via joint ventures with foreign companies, including Rosneft, several Chinese companies, and U.S. Chevron, and it has now left most of the day-to-day operations under the control of the foreign partners.

The company even plans to restart two heavy oil upgraders later this year as it seeks to reverse a severe decline in oil production, despite the latest sanction blow, against the Swiss-based trading arm of Rosneft, which has been marketing Venezuelan crude. Following the announcement of the new sanctions, Venezuela's oil exports actually rose, by 9 percent, as buyers rushed to stock up before the May deadline Washington had set for a wind-down of these purchases.

A barter deal in these circumstances seems like one of the very few way for Venezuela to find a market for its oil while receiving some much needed commodities.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Will We Really See Negative Oil Demand Growth This Year?
The Risk For Oil Is Shifting To The Upside
Iraq Plans Production Surge In The Face Of New OPEC Cuts


Mexican Firms Exchanges Corn And Water For Venezuelan Oil