Poland Lost $230 Million Trying to Buy Venezuelan Oil With Crypto

Poland’s attempt to buy Venezuelan crude through a Dubai trader ended with $230 million advanced, millions converted into cryptocurrency, tankers waiting empty off Venezuela, and almost none of the oil that had been promised.

The deal was struck in November 2023 between Orlen Trading Switzerland, or OTS, and Hannon International, a Dubai-based trading company founded by Kam Ho “Alex” Tse, according to the Financial Times.

OTS agreed to buy about 6 million barrels of Venezuela’s Merey 16 heavy crude for $345 million. The contract required a two-thirds advance. Within five days, OTS had wired Hannon $230 million.

The transaction came after Washington temporarily eased oil sanctions on Venezuela, creating a short window for traders to access discounted crude.

A Crypto Route Into Venezuelan Oil

Venezuela’s state oil company, PDVSA, had increasingly demanded advance payment in USDT, Tether’s dollar-linked cryptocurrency, after sanctions restricted conventional banking channels.

Hannon therefore had to turn Orlen’s money into crypto before it could secure the crude.

Tse first obtained 80 million USDT through a Dubai financial-services company. He then transferred $135 million to Horizon Global, another Dubai company.

Hannon says it received only 85 million USDT from Horizon, leaving a $50 million shortfall that is now being disputed in Dubai courts.

A further $30 million went to Gold Mar International Trading, with the expectation that it would be converted into USDT and ultimately used to secure oil through Lexcor Energy.

That money did not reach PDVSA.

Tankers Wait, Oil Does Not Arrive

As the money moved through Dubai, three supertankers chartered by Orlen sailed to Venezuela and anchored near the José export terminal.

OTS expected the 6 million barrels to be delivered in stages by December 19.

Nothing was loaded.

Hannon blamed delays first on PDVSA repricing and later on larger buyers receiving priority as traders rushed to exploit the sanctions window.

The ships remained offshore, accumulating demurrage charges.

By January 2024, Tse traveled to Caracas to try to secure the oil directly.

USB Sticks and Caracas Brokers

Hannon’s effort then moved into a network of local intermediaries and crypto payments.

Tse and a colleague carried USB sticks containing access credentials to large sums of USDT. They hired an armored vehicle and bodyguards.

On January 5, Tse says his colleague gave a broker, José Castillo, access to 60 million USDT at a Caracas hotel.

Later that month, they handed over another USB stick containing 50 million USDT at an Italian delicatessen.

Hannon subsequently lost contact with Castillo.

A total of 110 million USDT had been handed over. Still, no Merey 16 was loaded.

OTS and Hannon then tried to salvage the situation through other Venezuelan products.

A proposed purchase of lighter crude failed after OTS rejected the oil as heavily contaminated.

A separate fuel-oil deal produced only a partial result. One Orlen-chartered vessel eventually loaded about 500,000 barrels, roughly half the expected volume.

Tse also says Hannon handed a further 22 million USDT to another Caracas broker, Juan Rodríguez. Hannon later lost contact with him, too.

In Tse’s account, $132 million was handed to two Venezuelan brokers for little return.

Hannon says another $54 million was consumed by crypto fees and other attempts to secure oil.

Orlen Pulls the Plug

By early 2024, Poland’s political leadership had changed, and new management was taking control of state companies.

Samer Awad, the OTS chief executive who had initiated the Venezuelan trade, was pushed out along with Orlen chief Daniel Obajtek.

The new Orlen leadership identified the Hannon deal as a major problem.

On March 28, OTS terminated the original Merey 16 contract.

“We hope that you can give us another 5 days,” Tse wrote the following day, asking OTS to withdraw the termination notices.

It did not.

Internal OTS documents show the transaction had by then become an accounting and legal crisis, with staff assessing potential fraud, sanctions exposure, impairment and prospects for recovering the advance.

One internal estimate put shipping costs linked to the Hannon contracts at $72 million — more than twice the profit OTS had expected from the original trade.

The Polish government later estimated Orlen’s total losses at at least PLN 1.6 billion, or about $424 million, including shipping, legal and other costs.

The $230 Million Dispute

More than two years later, Orlen is still trying to recover the original $230 million advance.

Hannon says it acted as a “sleeve,” buying Venezuelan oil with USDT because OTS could not do so directly.

Orlen rejects that account, saying Hannon was simply contractually obliged to deliver the oil and remained responsible regardless of which intermediaries it used.

Polish prosecutors have charged Awad and other former OTS executives with criminal mismanagement. They deny the allegations.

Prime Minister Donald Tusk has folded the affair into a wider scrutiny of Poland’s state companies, saying: “Poles must learn the truth.”

The final irony came after Orlen abandoned the deal.

On April 15, 2024, one of the tankers previously chartered by Orlen loaded Venezuelan heavy crude at José for another buyer.

The oil had been available.

Orlen’s $230 million was not.