Poland lost $230 million trying to buy Venezuelan oil with cryptocurrency

Poland lost $230 million in an attempt to purchase Venezuelan oil using cryptocurrency

Poland's largest oil company, Orlen, suffered significant financial losses in an attempt to purchase Venezuelan crude oil through a Dubai-based trader. The country made a $230 million prepayment and converted a portion of the funds into cryptocurrency. However, the promised oil was almost never delivered.

The deal was concluded in November 2023 between Orlen's Swiss subsidiary, OTS, and Dubai-based Hannon International. OTS agreed to purchase 6 million barrels of Venezuelan oil for $345 million.

Under the terms of the contract, two-thirds of the amount was to be prepaid. OTS transferred $230 million to Hannon's account within five days of signing the contract. This agreement was made during a period when the US temporarily eased sanctions on Venezuelan oil.

Venezuela's state oil company, PDVSA, demanded payments in the USDT cryptocurrency due to banking sanctions. For this reason, Hannon was forced to convert the money received from Poland into cryptocurrency. Millions of dollars were lost during the cryptocurrency operations and the process of transferring through various companies.

In January 2024, the head of Hannon traveled to Caracas and handed over flash drives containing USDT cryptocurrency worth a total of $132 million to intermediaries. However, the intermediaries soon went out of contact, and the oil was still not delivered.

Meanwhile, three large supertankers hired by Poland waited in vain for oil to be loaded off the coast of Venezuela. Due to the non-delivery of oil, the fines and costs paid for the vessels idling off the coast exceeded $72 million. Later, only one vessel managed to receive about 500,000 barrels, half of the intended volume of oil.

In March 2024, following a change of government and company leadership in Poland, Orlen's new management canceled this contract. According to Polish government estimates, the company's total losses, including all legal and transport costs, exceeded 1.6 billion zlotys or $424 million.

Currently, the Polish prosecutor's office has initiated a criminal case against the former heads of OTS for abuse of office and illegal management. The country's Prime Minister, Donald Tusk, stated that a large-scale investigation into this scandal has begun and all details will be made public. Poland is still trying to recover the lost $230 million advance payment.

US President Donald Trump had announced that Venezuela's oil reserves had come under United States control. The agreement between the parties covers 17 strategic oil fields. The proven reserves in them exceed 65 billion barrels, and nearly $100 billion in private investment is expected to be injected into the projects.