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Is China Caving To U.S. Oil Sanctions?

Tsvetana Paraskova

China’s imports of crude oil from Venezuela dipped to a nearly nine-year low in September as major state-held Chinese companies back out of Venezuelan purchases, looking to avoid fallout from the tightened U.S. sanctions on Venezuela.

According to data from China’s General Administration of Customs, as carried by S&P Global Platts, China imported 143,838 barrels per day (bpd) of Venezuelan oil last month, the lowest import volume since December 2010.

Chinese buyers are expected to continue to shy away from buying Venezuelan oil through the rest of the year, according to S&P Global Platts.

China’s imports from Venezuela in September this year fell by 27.2 percent compared to September 2018, as China National Petroleum Corporation (CNPC) and its listed unit PetroChina have been skipping loadings from Venezuela since August, to avoid running afoul of the U.S. Administration.

Amid the tightening U.S. sanctions on Nicolas Maduro’s regime in Venezuela, PetroChina was said to have canceled loading plans in August that would have seen imports of 5 million barrels of Venezuelan oil into China. PetroChina was the largest importer of Venezuelan oil in China until the U.S. slapped more sanctions on the South American country.

In September, CNPC skipped loadings from Venezuela for a second consecutive month and is expected to continue skipping such purchases until the U.S. makes clear if secondary sanctions would apply to entities dealing with Venezuela’s PDVSA.

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While Venezuelan oil imports plunged, China’s total oil imports rose by 11 percent on the year in September, the first time since April that imports topped 10 million bpd.

Saudi Arabia kept its number-one supplier spot to China last month, ahead of Russia and Iraq. Angola, Oman, and Malaysia follow in the list of China’s top oil suppliers, taking advantage of the low Chinese imports of oil from Venezuela and Iran, due to the U.S. sanctions on Caracas and Tehran. China’s imports from the U.S., however, were even lower than those from Venezuela and Iran, due to the import tariff on U.S. crude oil amid the U.S.-China trade spat.  

By Tsvetana Paraskova for Oilprice.com

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