Even if China continues to thwart US sanctions on Iran, in the case of Venezuela Trump appears to be gaining the upper hand.
Bloomberg reported Friday that China National Petroleum Corp. (parent company of oil giant PetroChina Ltd) — the country’s biggest energy company — is for the first time in over a decade backing away from Vezenuelan crude, canceling shipments in August:
China National Petroleum Corp. has canceled plans to load about 5 million barrels worth of Venezuelan oil onto ships this month in the aftermath of the latest executive order by President Donald Trump, according to people with knowledge of the situation who asked not to be identified discussing proprietary information.
Beijing is seeking to reduce its exposure to the risk of Washington’s sanctions, even as it grapples with the US on other fronts.
This could prove a final massive economic blow to President Nicolas Maduro’s future prospects amid food and electricity shortages and hyperinflation, given China has been state-owned PDVSA’s top offload destination since the US brought unprecedented sanctions against it starting January 28th. The Trump administrated expanded the sanctions further on Aug. 5, aimed at severing Maduro’s final major cash lifeline.
Per Bloomberg’s figures, China has imported 339,000 bpd of Venezuelan oil this year, with most transported by PetroChina, but lately Russia’s Rosneft has sought to step up after sanctions were imposed, and is expected to continue delivery to Chinese independent refineries.
“The three August-loading cargoes canceled by CNPC’s subsidiary PetroChina Co. Ltd. haven’t so far attracted another buyer,” noted Bloomberg based on reports it’s seen.
Trump’s August 5th executive order was broadly interpreted as expanding the pressure campaign on countries continuing to do business with Caracas, including Russia, China, Cuba, Iran, Turkey and India. Washington has demanded that Maduro hand over power of his own accord to US-backed opposition leader Juan Guaido.
“All property and interests in property of the Government of Venezuela that are in the United States… are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in,” the executive order states.
The “sweeping embargo” came amid White House talk of imposing a complete “quarantine” or “blockade” of the socialist Latin American country, and has been considered the most aggressive and crippling US action against Venezuela to date.