If it is still too early to tell what the portents are for full resumption of Venezuela’s oil exports following President Donald Trump’s electoral defeat in his bid for a second term in office, Caracas’ return to doing oil business with its key one-time top customers, the Chinese state companies China National Petroleum Corp (CNPC) and Petro-China, marks an undoubted silver lining in a dark cloud that had long settled over the country’s economy.
Last week it was disclosed that the state-run Venezuelan oil company, PDVSA, had recommenced supplying oil to China through normal channels rather than the clandestine means that had obtained since around August 2019 when US pressure forced ships to stop loading crude and fuel at Venezuelan ports.
A November 27 Reuters report stated that Venezuela has recommenced direct oil shipments to China notwithstanding the fact that the US sanctions are still in force. Hitherto, the imposition of sanctions had compelled Venezuelan oil supplies to China to be moved through clandestine high-seas arrangements that included the boosting of shipments of oil to Malaysia to facilitate transfers of cargo between vessels at sea to allow Venezuelan crude to continue flowing to China after changing hands and using trade intermediaries.
Trump’s defeat at the November polls has still not stopped an administration now in the evening of its day from issuing threats against transgressors of its sanctions. Last week a report indicated that the US Treasury Department spokesman had said that “those engaged in activity in the Venezuelan oil sector, risk exposure to sanctions.” The Reuters report named the first tanker to resume transport of Venezuelan crude directly to China as the “Kyoto” and said that it had been identified by a shipping monitoring service, TankerTrackers.com, while loading 1.8 million barrels of heavy crude at Venezuela’s Jose port in late August. Other tankers are reportedly in the process of discharging crude at Chinese ports. Some of these deliveries of oil to China are reportedly being done by way of procedures known as ‘dark voyages’, arrangements for which include the temporary disabling of location transponders.
Efforts by the Trump administration to remove the Maduro administration from office by strangling the country’s oil exports have reportedly also been undermined by the emergence of several Russian companies as customers of the Venezuelan oil company PDVSA in recent months. Reuters says that the emergence of these firms has allowed PDVSA to continue shipping oil to Asian destinations despite withdrawals by established customers.
The direct shipments come ahead of January’s transition of power in the United States from Republican President Donald Trump to Democratic President-elect Joe Biden, whose advisers have said he would retain sanctions but shift the focus of US strategy.
