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Venezuela has restarted direct shipments of crude oil to China despite U.S. sanctions, Reuters has reported, citing shipping data and documents from PDVSA.
Until now, Venezuela’s oil company sold oil to China via ship-to-ship transfers at sea, similar to sanction buddy Iran. Now, according to Reuters’ data, tankers loaded with Venezuelan crude are sailing straight to China.
TankerTrackers.com identified the first tanker that left Venezuela en route to China in August this year. Now, there is at least one more unloading crude at a Chinese port and two more, owned by PetroChina, that loaded crude in Venezuela earlier this month, according to PDVSA documents.
China is the biggest buyer of Venezuelan crude as it is of Iranian crude, despite U.S. sanctions aimed at stifling the two countries’ oil revenues. As a result of the sanctions, Venezuela’s production and exports have suffered gravely, with last month’s average in exports falling to 359,000 bpd. The drop followed the expiry of a grace period Washington had given to commodity traders to wind down their oil-for-fuel swap business with Venezuela, which was allowed for humanitarian reasons.
Yet the figure may not accurately reflect Venezuela’s total exports because of the ship-to-ship transfers the country has resorted to in order to get its crude abroad in spite of sanctions. The latest news from Reuters and TankerTrackers.com suggests Venezuela may be exporting more than what the official figures suggest.
Besides the ship-to-ship transfers, Venezuela and China are also employing another tactic used by Iranian tankers: switching the transponders off for most of their voyage and only switching them on again when they near their destination.
Chinese state majors CNPC and PetroChina stopped buying oil directly from PDVSA last year after the U.S. expanded the scope of its sanctions against Caracas to cover any company that buys oil from PDVSA.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.