$424 Million Poland-Venezuela Oil Deal Fizzles After USDT Payments
Poland's state-controlled refiner Orlen lost around $424 million in a deal to buy 6 million barrels of Venezuela's heavy crude oil, Merey 16. The transaction went sour after USDT payments were made without collateral or bank guarantees.
The deal was struck on a yacht in Abu Dhabi during the Formula 1 weekend in November 2023 between Orlen Trading Switzerland and a 25-year-old Hong Kong trader. On November 29, they signed an agreement for Orlen's Swiss unit to buy the oil for $345 million, with no collateral or bank guarantee required.
Orlen wired $230 million within five days of signing the deal, which was then swapped into USDT due to US sanctions locking Venezuela's state oil firm PDVSA out of the dollar banking system. The USDT was pushed through brokers in Dubai and handed over inside Caracas hotels and restaurants in small USB drives.
PDVSA claims it never saw a cent from the deal, saying it didn't allocate any cargoes to Orlen or its intermediaries because it hadn't been paid. Six chartered tankers sat off Venezuela for months waiting for the oil, leaving empty or going to other buyers at a shipping bill of around $72 million.
Warsaw prosecutors charged three former executives on August 7 with failing to protect 1.5 billion zloty ($378 million) of company assets. They face up to 25 years in prison for their role in the failed deal.