Chinese Firms have Been Buying Venezuelan Crude Oil Despite Sanctions

  • Millions of barrels of Venezuelan oil were sold to China in 2020.
  • Venezuela is currently grappling with an oil shortage.
  • Maduro has reached out to the Biden administration.

Some unscrupulous Chinese oil-dealing companies have been buying Venezuelan crude oil and mixing it with additives to disguise its true origin. This is according to a new Bloomberg report. It reveals a range of crafty methods used by guileful dealers to skirt US sanctions imposed on the Venezuelan oil industry.

Iranian oil tanker headed for Venezuela.

Some of the companies involved have been getting the oil from Venezuelan ships, with the transfers taking place in the high seas where few nations have jurisdiction. In most cases, the ships’ GPS and tracking signals are switched off and eventually interchanged to falsify vessel origin and destinations.

The US government has been trying hard to crack down on shipping companies that partake in such practices, but it appears that rogue oil traders are getting more sophisticated.

Exchanging oil for food and water is another tactic that was recently uncovered. Last year, Libre Abordo, a private Mexican firm, was among companies found to be doing this. It allegedly received millions of barrels of oil from Venezuela in exchange for water and corn. The strategy allowed the company to circumvent penalties as no money was involved.

Libre Abordo filed for bankruptcy soon after the discovery. It cited pressure from the US government.

Swissoil, is also alleged to have handled illegal Venezuelan oil. It recently came under fire for selling over 11 million barrels of embargoed oil to China in 2020. The firm has denied the allegations.

A Humanitarian Situation in Venezuela Due to Oil Sanctions

The Trump administration put enormous pressure on Venezuela’s oil trade by banning oil imports and exports. And now, there are looming concerns about the humanitarian impact of the prohibitions which have created a diesel deficit.

A significant number of the nation’s public transport vehicles, generators, and farm machinery utilize diesel. As such, shortages have far-reaching effects.

The country also faces a few challenges related to its reserves. While it needs to import fuel due to lack of petroleum processing chemicals, it also needs to export a lot of its crude oil in order to free up storage space. The undertaking is much more difficult now because of export prohibitions.

President Maduro has already reached out to the current US administration.

There is hope that the new Joe Biden administration will make things easier for the Venezuelan citizenry by easing sanctions on critical products such as oil.

President Maduro has already reached out to the current US administration led by Joe Biden and said that his government is ready for dialogue.

“We are willing to walk a new path in our relations with Joe Biden’s government based on mutual respect, dialogue, communication, and understanding,” he said on Saturday.

Analysts believe that the Joe Biden administration will be more lenient when dealing with Venezuela as compared to the Trump government.  Biden’s team has already signaled that the administration will continue to support humanitarian policies aimed at helping Venezuelan citizens during these harsh times.

Previous sanctions on the Maduro regime are, however, set to stay in place.

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Samuel Gush

Samuel Gush is a Technology, Entertainment, and Political News writer at Communal News.

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