To evade U.S. sanctions, Venezuela's oil is being traded using USDT.

According to Reuters, as the United States reinstates oil sanctions on Venezuela, the country's state-owned oil company PDVSA plans to increase the use of USDT as a payment method for its crude oil exports.

Venezuela is the most important oil-producing country in South America, and oil is the lifeblood of Venezuela's economy. Since 2019, Venezuela has been under oil sanctions imposed by the United States. Prior to the sanctions, Venezuela's crude oil primarily flowed to refineries along the Gulf Coast of the United States and in Mexico.

According to Reuters, since last year, PDVSA has been slowly shifting its oil sales towards USDT, the world's largest stablecoin. Sources familiar with the matter indicate that the return of oil sanctions is accelerating this transition as it reduces the risk of sales revenue being frozen in foreign bank accounts.

Venezuelan Oil Minister Pedro Tellechea stated:

According to the terms of the contracts, we have different currencies. And in some contracts, digital currencies might be the preferred method of payment.

The US dollar has long been the preferred currency for transactions in the global oil market. Although cryptocurrencies are gaining traction in some countries, cryptocurrency payments are not yet common.

However, in the first quarter of this year, PDVSA has converted many spot oil transactions into contract mode and requested half of the payment to be made in USDT.

These transactions are facilitated through intermediary agencies to evade scrutiny from compliance departments, with many of them related to sales to China.

As the U.S. Treasury Department permit for oil and gas production is set to expire at the end of May, and with the U.S. considering reimposing sanctions on Venezuela, the permit has not been renewed. Oil analysts anticipate that Venezuela's oil production, exports, and revenue will soon reach their limits.

However, Venezuelan Oil Minister Pedro Tellechea denies this claim, stating that the Venezuelan state oil company "has strong power in trading" and is prepared to address the return of Washington's sanctions on a commercial level.