Report: China Shipping Millions of Barrels of Venezuelan Oil

17 March 2022, Venezuela, Anzoategui: Side view of the "Jose Antonio Anzoategui" industria
Stringer/picture alliance/Getty Images

China has been transporting millions of barrels of Venezuelan oil through a state-owned defense firm since 2020, evading U.S. sanctions imposed on Venezuelan oil, as part of a move to offset the socialist regime’s large debt to the Chinese Communist Party, Reuters reported on Friday.

The illegitimate Maduro regime’s foreign assets and its oil exports were heavily sanctioned by the Trump administration in 2019. As a result, the Chinese state-owned PetroChina oil company had announced in August 2019 that it would cease making direct purchases of Venezuelan oil so as to not risk violating U.S. sanctions.

The Reuters report details the method that China has allegedly been employing since November 2020 to transport sanctioned Venezuelan crude oil produced by the state-owned Petróleos de Venezuela (PDVSA) company overseas towards China.

China stopped officially reporting crude oil imports from Venezuela in October 2019, but reportedly continued to receive shipments of Venezuelan crude via traders who falsely relabeled the crude oil shipments as Malaysian bitumen, purchasing an estimated $3.5 billion worth of Venezuelan oil between 2020 and 2021.

Anonymous sources told Reuters that instead of PetroChina, a subsidiary of China’s National Petroleum Corporation (CNPC), directly purchasing Venezuelan crude oil, China has been transporting it through its China Aerospace Science and Industry Corp (CASIC) since November 2020 via three tankers that CASIC acquired from PetroChina in that same year, with the sanctioned oil ultimately being stored in a PetroChina-owned tank farm.

Emma Li, an analyst of the England-based Vortexa Analytics company, told Reuters that the shipments amount to roughly 42,000 barrels per day, representing about three percent of China’s consumption.

According to tanker tracking data given to Reuters by the market data company Refinitiv and by Vortexa Analytics, China’s CASIC has taken 13 cargoes so far, equaling a total of 25 million barrels of oil that have been sent from Venezuela to China through the defense firm company’s tankers, with two more vessels due to arrive in China in September.

“These shipments are strictly under a government mandate, where CASIC was designated to move the oil as payment to offset Venezuelan debt to China,” the anonymous source said to Reuters.

Venezuela’s socialist regime has not officially disclosed the total amount of its debt to China. During the regime of Hugo Chávez (1999-2013), Venezuela had borrowed more than $50 billion from China through oil-for-loan deals, which forced the country, now under the rule of socialist dictator Nicolás Maduro, to negotiate a one-year grace period with China in 2016.   

Venezuela had stopped making its payments as a result of the utter economic and societal meltdown wrought upon by the collapse of the nation’s socialist system. As a result, Venezuela had to negotiate a new grace period with Chinese banking institutions in 2020 over $19 billion in loans that are to be paid off with oil shipments.

Venezuela was sued by the Chinese-state owned oil and gas company Sinopec in 2017 due to its failure to pay its dues. In 2018, China granted the cash-starved Maduro regime an additional $5 billion credit line in return for future oil payments.

A second anonymous source told Reuters that, in addition to paying down debt, the cargos also served to pay for other goods such as Chinese coronavirus vaccines. The Maduro regime has distributed China’s Sinopharm vaccine to the majority of the Venezuelan population, with Russia’s Sputnik-V vaccine being reserved for the elderly and instances of Cuba’s “Soberana” vaccine candidates being distributed to children.

The Maduro regime has heavily relied on China to exert and maintain its iron grip on the country – not just economically but on a logistical and technological level. The Chinese telecom company ZTE aided the Maduro regime with the implementation of its Fatherland Card system, which is heavily based on China’s social credit system and which the Maduro regime uses to amass large quantities of personal data and to control and distribute subsidized fuel rations, food handouts, money stipends, and obtain Coronavirus vaccination data. 

China sent its Latin American envoy, Cai Wei, to meet with the socialist dictator this month as a counter to Speaker of the House Nancy Pelosi’s (D-CA) visit to Taiwan.

Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.


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