India refused to buy oil from Venezuela for Petro

As stated by the Minister of foreign Affairs of India Sushma Swaraj (Sushma Swaraj) at a press conference held this week, India will not be able to buy Venezuelan oil for the cryptocurrency Petro, despite a 30% discount.

«According to the latest Reserve Bank of India (RBI), we are unable to make transactions using the cryptocurrency, but we will think about what means of payment can be used for this offer».

According to the RBI imposed restrictions, all financial institutions regulated by the Reserve Bank of India, must prohibit its customers and users to buy cryptocurrency. It is also prohibited to provide financial services to companies that are associated with cryptocurrencies.

And although the decree RBI there is no direct prohibition of cryptocurrency transactions, it is not surprising that the government of India wants to buy oil for Petro even with the discount.

Venezuela has the world’s largest oil reserves. However, the country faces pressure in the form of sanctions from the United States, which complicates the realization of crude oil in the international market. In December 2017 Venezuela announced its cryptocurrency oil, Petro, conceived as a means of payment, which could circumvent the economic blockade of the United States.

Petro became the first cryptocurrency backed by real asset, namely Venezuelan oil. The price of one Petro was tied to the price of a barrel of oil in the international market. In addition, Petro became the first state cryptocurrency. Despite this, many Venezuelans reacted to it very critically. For example, the Venezuelan national Assembly called cryptocurrency Petro «unconstitutional» and «fraudulent».

Interestingly, India is not concerned about the U.S. sanctions against Venezuela and Iran, the latter is the main supplier of oil to India.

«India should only UN sanctions and not unilateral sanctions by any country. Therefore, we will continue to trade with Venezuela despite the fact that the import of Venezuelan oil in India fell to lows of 2012,» said Swaraj.

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