China National Petroleum Corp stopped carrying Venezuelan oil in August 2019, but traders continued to rebrand the fuel as Malaysian, Reuters reported. Since November 2020, China Aerospace Science and Industry Corp has been carrying Venezuelan crude on three tankers it acquired that year from PetroChina.
The 13 shipments were declared “crude oil” at Chinese customs, without specifying origin, and were moving as payment to offset Venezuelan debt to China, according to three sources. China’s foreign ministry said the two nations are engaged in cooperation over “oil for humanitarian goods”.
China has imported 42,000 barrels a day of Venezuelan oil since January, equivalent to about 3% of its consumption.
Venezuela borrowed more than $50 billion from Beijing under loan-for-oil deals under Hugo Chavez. According to Government sources, China has extended a grace period for $19 billion of the loans outstanding.
China, the world’s top oil buyer, has been buying more oil from Russia amid soured relations with Washington. The CASIC shipments enter China under a special green channel.
CASIC, a defense conglomerate, was picked for the oil job because it is politically powerful and has limited global financial exposure, making it less vulnerable to sanctions.
CASIC takes over three Very Large Crude Carriers from PetroChina for the transport of Venezuelan oil, and also takes over a tank farm in the eastern coastal city of Ningbo.
CASIC received all Venezuelan oil cargoes at the Jose port through Cirrostrati Technology Co Ltd, which could not be reached for comment.
CASIC ships oil to China, where independent refiners are increasingly relying on cheaper crude from Iran and Venezuela. The government is now taking charge of these Venezuelan supplies, saving the refiners logistical headaches and western sanction-related risks.
For more on this story, please consider these sources:
- EXCLUSIVE Chinese defence firm has taken over lifting Venezuelan oil for debt offset -sources – Reuters
- Chinese firm defies US sanctions, ships Venezuelan oil to offset debt – Press TV
- The Chinese Defense Firm That Shipped $1.5 Billion Of Venezuelan Oil – Oil Price