Beijing to lose billions: China loses access to cheap oil from Venezuela
20 January 15:12
The last tankers carrying Venezuelan crude oil, which is subject to US sanctions, are expected to arrive in Asia in the coming days.
This was reported by Bloomberg, according to "Komersant Ukrainian".
This effectively deprives China of access to cheap raw materials that previously supported its oil refining sector.
According to analytical companies Kpler and Vortexa, the Tamia and Loyalty, loaded in November and December, respectively, are likely to be among the last shipments of Venezuelan oil to Asia. The total cargo volume is about 3.8 million barrels, and the ships are passing Cape of Good Hope with an expected arrival next month.
“There are currently about 24 million barrels of Venezuelan oil stored in floating storage facilities around the world, about half of which are in Asia,” Kpler analysts note.
Since Maduro seized power in early January, the US has sought to control trade in Venezuelan oil and resume supplies to American refineries. Commodity traders Vitol Group and Trafigura Group also play an important role thanks to US licenses.
For Chinese buyers, especially private refiners, the outlook is less optimistic. This week, Vitol offered China Merey at a discount of about $5 per barrel compared to Brent, which is significantly less than before, when discounts reached $15 per barrel.
Traders warn that the volumes of Venezuelan oil already at sea and heading for China may only meet the needs of the world’s largest importer for one to two months. After that, China will have to pay international prices for Venezuelan oil or look for more expensive alternatives, such as Canadian or Iranian grades.
China currently remains the world’s second-largest consumer of crude oil. A significant portion—about 20%—comes from suppliers that are subject to sanctions by the US and other Western countries.
