Venezuela resumed direct oil shipments to China despite US sanctions

Venezuela has resumed direct oil shipments to China after U.S. sanctions sent shipments to Asia hidden for more than a year, according to ship tracking data from Refinitiv Eikon and internal documents from the state-owned Petróleos de Venezuela (PDVSA).

State-owned companies China National Petroleum Corp (CNPC) and PetroChina, which have long been among PDVSA’s main customers, have stopped loading crude oil and fuels into Venezuelan ports. in August 2019 after Washington extended its sanctions to companies trading with the Venezuelan state.

The imposition of so-called “ secondary sanctions ” in 2019 was part of a strategy by President Donald Trump’s administration to put pressure on Nicolás Maduro’s departure, but failed to completely bring down the export of oil from the South American nation .

Instead, shipments of crude oil extracted from PDVSA to Malaysia have proliferated, where the transfer of goods between oil tankers at sea has allowed most of Venezuela’s oil exports to continue flowing to China, having changed hands and used intermediaries.

PDVSA, PetroChina, CNPC and the Venezuelan Oil Ministry did not respond to requests for comment.

A spokesman for the US Treasury Department said Wednesday that those “involved in activities in the Venezuelan oil sector face sanctions”.

The first tanker to resume transporting Venezuelan crude oil directly to China was the Kyoto, identified by the TankerTrackers.com monitoring service while loading 1.8 million barrels of Venezuelan heavy crude oil into the port of Jose in late August.

At least one other tanker, the Warrior King, is unloading Venezuelan crude in the Chinese port of Bayuquan, while two large oil tankers owned by PetroChina loaded crude into Venezuela this month., according to PDVSA’s export schedules, shipping documents and Eikon Refinitiv data.

The Kyoto, contracted by a firm named Wanneng Munay according to one of the PDVSA documents, was unloaded at the Chinese terminal in Dalian early November after traveling part of its route to Asia on a “black trip” or with the transmitter off, they showed Eikon data.

Wanneng Munay is part of a group of more than a dozen Russian registered companies with no prior known experience in the oil trade that have emerged as PDVSA customers in recent months.

The emergence of these companies has allowed PDVSA to continue shipping crude oil to Asia in recent months, despite the withdrawal of long-term customers such as India Reliance Industries and Thailand Tipco Asphalt. after the Treasury Department ceased the authorizations granted to these companies.

Wanneng Munay could not be reached. The company that registered its website, Moscow-based OGX Trading, told Reuters in October that the company had not been able to start trading due to the coronavirus. Monte Nero Management SA, operator of Kyoto, did not immediately respond to a request for comment.

NEW GOVERNMENT

The resumption of shipments to China anticipates the handing over of power in the United States in January from Republican Trump to President-elect Joe Biden, whose advisers said the Democrat could keep the sanctions policy but change the focus of that strategy.

The shipments also come after Washington sanctioned two units of Russia’s Rosneft earlier this year and blacklisted a group of shipping companies that continued to do business with PDVSA. following the increase in sanctions in early 2019. Rosneft says it has discontinued its business with PDVSA, but the sanctions on its units have not been lifted.

The US State Department did not comment on the resumption of direct exports to China.

On Thursday, the Togo-flagged tanker Warrior King, which was owned by Venezuela until September, was unloading at the Bayuquan oil terminal in China., after carrying around 600,000 barrels of heavy Merey 16 crude loaded in September, according to another of the PDVSA documents and data from Refinitiv Eikon.

PDVSA did not list the customer of that shipment in its data. Panama’s Umbridges Trade SA company, which owns the ship, was not reached for comment.

PDVSA documents and ship tracking data also prove this Two PetroChina-owned supertankers with the capacity to carry around 2 million barrels of crude oil each loaded Venezuelan heavy crude into Jose in the past few days.

One of the ships, the Xingye, left Venezuela on Thursday, targeting Singapore as a destination, according to Eikon. The other, the Thousand Sunny, has not yet sailed. Both ships were owned by a joint venture between PDVSA and PetroChina until the beginning of the year, when the Chinese took full ownership.

The buyer behind the two shipments is a company called Cirrostrati Technology Co LTD, according to PDVSA documents. Reuters could not contact the company or determine where it operates.

China is part, together with Russia and Cuba, of the group of countries that have publicly criticized the sanctions against the member state of OPEC. The Maduro regime held a meeting in Venezuela this month with a delegation of Chinese officials and businessmen who support a new law that allows the government to sign oil deals confidentially.

Maduro said during the meeting that he would send a letter to Chinese President Xi Jinping promoting a stronger trade relationship between nations. “We have to move forward in investments, in building wealth, in new alliances. The anti-blockade law allows everything. Let’s do it in a new phase ”, added the president during the meeting.

By Luc Cohen and Marianna Parraga (Reuters)

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