Venezuela reportedly turns to USDT for oil export as US sanctions bite

Venezuela’s state-run oil company PDVSA is allegedly set to increase crypto usage in its crude and fuel exports as the U.S. strengthens oil sanctions against the country.

Venezuela‘s PDVSA, the world’s fifth largest oil exporter, is turning to stablecoin Tether (USDT) for fuel exports, as the U.S. government has re-imposed sanctions on it due to a lack of electoral reforms, according to a Reuters report, which cites sources familiar with the matter.

While the frequency of PDVSA’s crypto usage remains uncertain, insiders suggest that the company has been gradually shifting its oil sales to USDT since last year. In a commentary with Reuters, Venezuelan oil minister Pedro Tellechea acknowledged that the country has “different currencies, according to what is stated in contracts,” noting that in some contracts crypto might be the preferred payment method.

PDVSA is reportedly mandating new customers and potentially even existing contracts to hold crypto in digital wallets, though it’s unclear whether crypto payments are the preferred choice or a backup option.

Previous encounters with crypto in Venezuela have been faced with challenges, as evidenced by the recent closure of the Petro project. Launched in 2018 as a state-backed token tied to oil reserves, Petro faced controversy and failed to gain significant traction among citizens.

Despite President Nicolás Maduro’s initial optimism about leveraging the token to navigate U.S. sanctions and address economic woes, Petro’s demise in January marked the end of a nearly six-year effort.