Traders have been rebranding Venezuelan oil shipments as originating from Brazil to circumvent U.S. sanctions and reduce logistics costs, according to Reuters. Since July 2024, this practice has enabled tankers to sail directly from Venezuela to China, bypassing the traditional transshipment point in Malaysian waters and shortening the voyage by about four days. This strategy has helped Chinese buyers, particularly independent refiners, secure bank financing and avoid sanctions-related penalties. The rebranded shipments have been valued at over $1 billion, with approximately 67,000 barrels per day of mixed bitumen imports from Brazil being registered by China.

The United States has imposed sanctions on Venezuelan energy exports since 2019 to reduce oil export revenue that funds the government of President Nicolás Maduro. In response, Maduro’s government has rejected these sanctions, labeling them as an “economic war” designed to cripple Venezuela. Despite these sanctions, Venezuela’s oil exports to China have continued, with independent refiners playing a significant role in facilitating these transactions.

This development highlights the ongoing challenges in enforcing sanctions and the lengths to which traders and buyers are willing to go to maintain access to Venezuelan oil. It also underscores the complex dynamics of global oil trade, where geopolitical tensions and economic interests intersect.

Source: Reuters