China CNPC skips Venezuelan oil loading for second month: sources
China National Petroleum Corp (CNPC), a leading buyer of Venezuelan oil, will skip cargo loadings for a second month in September as the state oil giant looks to avoid breaching U.S. sanctions, two sources with knowledge of the matter said.
CNPC made a surprise halt last month in loading Venezuelan oil after the Trump administration in early August froze Venezuelan government assets in the United States and officials warned companies against dealing with Venezuela’s state-run oil company, Petróleos de Venezuela, S.A., or PDVSA.
“CNPC at the group level has made it clear not to load Venezuelan oil,” said one source with direct knowledge of CNPC’s position on Monday, without giving a timeline on how long the suspension would last.
But Venezuelan oil is still arriving in China via other means.
Russian state oil major Rosneft (ROSN.MM) has become the main trader of Venezuelan crude, shipping oil to other buyers, including China, and helping Caracas offset the loss of traditional dealers who are avoiding it for fear of breaching U.S. sanctions.
Chinese customs data showed China’s direct imports of Venezuelan crude plunged 40% in July to just over 700,000 tonnes, the lowest monthly amount in nearly five years. But a growing number of cargoes of Venezuelan crude are being sent to China by intermediaries, mostly Rosneft, often from Asian transhipment hubs like Linggi and Tianjung.
China has been the largest importer of Venezuelan crude since Washington slapped sanctions on PDVSA in January. The United States had previously been the largest customer.
A separate senior Chinese industry source said last month that CNPC interpreted the Trump administration’s executive order as a potential prelude for more extensive sanction measures that could potentially hit CNPC as a leading oil client of Caracas.
CNPC declined to comment.
A PDVSA crude oil loading program seen so far no CNPC cargoes are planned for this month.
PDVSA did not respond to a request for comment.
The executive order President Donald Trump issued on Aug. 5 threatens to freeze U.S. assets of any person or company determined to have “materially assisted” the Venezuelan government.
Other Chinese crude oil buyers have also been warned on making Venezuelan purchases at a recent meeting between the National Development & Reform Commission (NDRC), China’s state planner, and about six independent refineries, according to a source who was briefed on the meeting.
“At the meeting NDRC told these plants, which process (Venezuelan crude) Merey to make bitumen, that there will not be supplies from CNPC and that they should look for replacements to maintain production,” said the source.