Why the sanction of American did not stop Venezuela exporting oil to China?
For major economies, oil is an important strategic resource, and plays an important role in industrial development. It once has been called “the blood of industry”. When speaking of oil, most of us will come up with Saudi Arabia, because there are many oil tycoons in this country, and rich in oil resources reserves has created great wealth for the local.
In fact, Saudi Arabia is not the country with the largest oil reserves, but Venezuela is. According to the related statistics, the explored oil reserves in Venezuela have reached 296 billion barrels, which is the country with largest oil reserves.
Venezuela had earned great profits through selling oil to other countries. However, it did not last for a long period of time. Under the sanctions of the United States, Venezuela’s oil export industry was greatly impacted, and even fell into a standstill situation for a time.
In 2019, United States announced to impose sanctions on Venezuela oil companies. After that, Venezuela has seen an exodus of oil buyers. The report on 22nd January showed that Venezuela’s oil exporters exported at least 11.3 million barrels of oil to China in 2020 with the help of a Swiss oil trading companies.
It may puzzle many of us that since Venezuela can export oil through changing the export destination, then China certainly will not be its only choice. Why is Venezuela willing to export oil to China, and making its volume exceeds 10 million barrels?
Regarding on this, there are two factors.
First one is that China has always been the country with the largest oil demands. In the year of 2020, China is the first country to recover the economic activities under the pandemic situation. Thus, China’s strong demands on oil has become the key to revive Venezuela’s oil exports.
Related statistic shows that China imported crude oil worthy of $163.8 billion in first 11 months of 2020. Currently, the energy demand in a lot of countries remain flagging, and China now becomes a “life saver” for Venezuela’s oil exporters.
Second one is that the oil export for Venezuela is facing unprecedented crisis under the sanctions of the United States, even though it has the largest oil reserves. Besides, due to bad governance and health events, Venezuela’s position in global oil market has been greatly diminished.
Now, for oil traders in Venezuela, their main task is to explore international market to recover the market shares. Or it will be useless even if the oil reserves are rich.
It needs to know that China is on Venezuela’s side in the “oil dispute” between the United States and Venezuela. In past, China claimed objection towards America’s restriction for Venezuelan oil. Besides, China supports Venezuela to export oil to China. And China says it will take necessary measures to protect the legitimate rights and interests of its companies and ensure the normal operation of legitimate trade activities between China and Venezuela.
Posted by KAYSUNS, the stainless steel pipe and fittings supplier.