Two sources with knowledge of the matter confirmed on Wednesday that Citgo Petroleum, a U.S. refiner, has bought Venezuelan crude for the first since 2019. That was when it severed its ties with Petroleos de Venezuela - the state-run oil company. The 830,000-barrel-per-day refiner, which is expected to be taken over by an affiliate of hedge fund Elliott Investment Management to pay Venezuela-linked creditors following a court-ordered auction, has the network in the U.S. that is most fit to process Venezuela's heavy ?sour oil.

Citgo is not allowed to import Venezuelan barrels. This has been the case since 2019. Since 2019, Citgo has been denied access to Venezuelan barrels.

Caracas-headquartered PDVSA months after the re-election of President ?Nicolas Maduro, which the U.S. did not recognize.

Washington and Caracas agreed to a $2 billion deal shortly after Maduro's capture by U.S. troops. The government in Caracas is now led by interim president Delcy Rodriguez. Since then, trading companies have been marketing millions of barrels Venezuelan oil.

Citgo purchased a cargo from Trafigura of around?500,000 barrels Venezuelan heavy crude, for delivery in February, according to sources who asked to remain anonymous to discuss confidential information.

Citgo and Trafigura didn't immediately respond to comments.

The deal is a significant milestone in U.S. attempts to normalize Venezuelan oil and boost its revenue. Washington gained control of Venezuelan oil shortly after Maduro was captured. Citgo is also a key player, as it has in recent years resorted to U.S. crude oil and other Latin American heavy grade to fill Venezuela's void.

Citgo was purchased by PDVSA in the 1980s in order to ensure a North American outlet for Venezuelan crude oil. The company was one of the biggest buyers?of Venezuelan crude oil until 2019 when the entire energy sector in Venezuela was subjected to U.S. sanctioning measures.

Citgo, Venezuela's crown jewel in the overseas market, was also a major supplier of refined products.

Citgo was not allowed to access Venezuelan oil, even after sanctions were partially lifted a few years ago. This allowed other U.S. refiners the opportunity to import cargoes through U.S. giant Chevron.

U.S. officials say they have accelerated the deals signed with Vitol, Trafigura and other trading houses, the first after Maduro was captured, in order to clear the massive oil stockpiles caused by the U.S. blockade that forced the country to reduce its crude production. Reporting by Shariq KHan in New York, and Marianna Parra in Houston. Editing by David Gregorio.

(source: Reuters)