Venezuela to Increase Oil Exports to One Of Its Top Buyers Despite U.S. Sanctions Threat

1:25

Venezuela is increasing oil exports to China to levels not seen in nearly two years, according to a report from Bloomberg, despite new U.S. sanctions aimed at curbing its sales. Shipments are expected to reach 400,000 barrels per day in March, the highest since June 2023, based on shipping data and vessel tracking.

The rise comes as the Trump administration escalates economic pressure on Venezuela by recently revoking Chevron's license to operate in the country and threatening 25% tariffs on nations that purchase Venezuelan oil. The Trump administration's measures include secondary tariffs, which could impact China, Venezuela's largest oil buyer.

Beijing plans to import Venezuelan crude through intermediary firms that use concealed shipping methods, such as spoofing vessel locations and falsifying documents, to avoid detection, Bloomberg reports.

A report from Reuters earlier in the week, however, suggested that Trump's tariff threats have led to uncertainty in the Chinese oil market, as some traders cited by the news agency said they were refraining from purchasing April shipments until they had greater clarity on the policy's implementation. "The worst thing in the oil market is uncertainty. We won't dare touch the oil for now," a Chinese oil trader told Reuters. Another executive from an independent refinery described the situation as "a total mess."

While some refiners paused purchases, many industry analysts believe that China's imports of Venezuelan oil will ultimately continue. Unless Beijing explicitly directs refiners to halt imports, Chinese buyers, particularly independent refiners known as "teapots," are expected to find alternative ways to procure the crude. Reuters also noted that a longstanding oil-for-debt agreement between China and Venezuela remains active, with a state-affiliated trading firm still receiving shipments.

The Biden administration had previously allowed limited U.S. engagement with Venezuela's oil sector, including a secret deal that permitted Chevron to make payments to the Venezuelan government. Trump's recent moves mark a return to stricter policies, with the revocation of Chevron's license forcing the company to wind down operations in Venezuela by May 27.