PDVSA which is the oil firm of Venezuela run by the state bought foreign crude oil that is worth about 440 million dollars. The oil bought was directly shipped to Cuba on credit terms that were friendly in nature which often resulted in a loss. This is per internal documents of the company which were reviewed by Reuters. These particular shipments are actually the first instances which were documented regarding the OPEC nation buying foreign crude oil for the purpose of supplying it to regional allies instead of selling them oil from its own huge reserves. The nation of Venezuela made the oil deliveries at a highly discounted price which had not been reported previously in spite of its urgent need for foreign currency to actually support its collapsing economy and for the purpose of importing food & medicine among the situations of severe shortages.
The open market purchases of oil for subsidizing one of the few remaining allies of Venezuela that is Cuba emphasized it rising global isolation and the disintegration of its sector of energy under the socialist president Nicolas Maduro. This particular purchase of crude oil by Venezuela came as the nation's crude production hitting a 33 year low in the first quarter of the year 2018. The production was down by 28 percent in twelve months. The refineries of the nation of Venezuela are actually operating at about one third of its capacity and the workers employed there are resigning in huge numbers.
As per the prices on the internal documents reviewed by Reuters, it is reported that PDVSA bought the crude for up to about twelve dollars per barrel which is more than it priced the same oil when it was being shipped to the nation of Cuba. But the nation might not be paying cash for the cargo because the nation of Venezuela has long accepted the goods and services from the Cuban nation in return for oil under a deal signed in the year 2000 by the late presidents of the nation Hugo Chavez and Fidel Castro. PDVSA, the government of Venezuela and the government of Cuba did not respond to any of the requests made for commenting in this regard. The government of Venezuela had previously stated that it only imports oil for the purpose of blending with its own tar-like crude oil for the improvement in oil quality and create an exportable product or for feeding its refinery in Curacao.