Since November 2020, China Aerospace Science and Industry Corp (CASIC) has been transporting Venezuelan crude oil in three tankers that it acquired that year from PetroChina.
China entrusted a state-owned company focused on military defense, shipping millions of barrels of Venezuelan oil despite U.S. sanctions, as part of a deal to offset Caracas’ billion-dollar debt to Beijing, according to three sources and data from tanker tracking by Reuters.
China National Petroleum Corp (CNPC) stopped transporting Venezuelan oil in August 2019 after Washington tightened sanctions on the South American exporter. But it continued to arrive in China through traders who changed the name of the fuel to Malaysian, reported the news agency
Since November 2020, China Aerospace Science and Industry Corp (CASIC) transports Venezuelan crude in three oil tankers that it acquired that year from PetroChina. The oil is stored in a tank farm also taken over by PetroChina, the sources said.
The three CASIC tankers load in Venezuela with their transponders active, allowing third-party tracking, Eikon data showed.
The firm has taken 13 cargoes carrying a total of around 25 million barrels of oil, including two vessels due to arrive in China in September, according to loading schedules from Venezuelan state oil company PDVSA and tanker tracking data from Refinitiv. and Vortexa Analytics.
The 13 shipments, worth about $1.5 billion at formula prices for Venezuela’s flagship-grade Merey crude, were declared “crude oil” at Chinese customs, without specifying the origin, one of the sources said.
“These shipments are strictly under a government mandate, where CASIC was appointed to move the oil as payment to offset Venezuelan debt (with China),” said the person consulted.
Without commenting on debt compensation, China’s Foreign Ministry said on Friday, August 26, that the two nations are committed to cooperation on “oil for humanitarian goods”.
“The cooperation meets the current needs of Venezuela and is also in line with humanitarian principles,” a ministry spokesman said, adding that China opposes unilateral US sanctions and long-arm jurisdiction.
A second source said that while part of each shipment pays off debt, other goods, such as COVID-19 vaccines, are also being subtracted from crude sales.
“All the money raised stays in China. The Venezuelan Ministry of Foreign Affairs is in charge of conciliation and accountability,” he said.
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At approximately 42,000 barrels per day, these shipments have increased total Venezuelan oil to China to some 420,000 b/d between January and July this year, equivalent to about 3% of China’s consumption, according to Emma Li, an analyst at Vortexa, which tracks such flows.
China has not officially reported any crude oil imports from Venezuela since October 2019.
Venezuela’s debt dates back to 2007, the era of then President Hugo Chavez, when the country borrowed more than $50 billion from Beijing under loan-for-oil deals.
Reuters could not determine how much of Venezuela’s debt remains outstanding. In August 2020, Beijing agreed to extend a grace period on $19 billion of the loans, but China and Venezuela have not said whether that period has ended.
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