Trump’s tariff threats cast uncertainty over Venezuelan oil trade with China

Venezuelan oil exports to China faced disruption on Tuesday after US President Donald Trump announced a 25% tariff on countries importing Venezuelan crude, effective April 2.

The move deepens market uncertainty, especially following recent U.S. restrictions on Iranian oil shipments to China.

As part of broader sanctions on Venezuela, the Office of Foreign Assets Control (OFAC) issued General License No. 41B, allowing Chevron to wind down certain joint ventures in the country—a decision with major implications for the energy sector and US-Venezuela relations.

Chinese traders and refiners, already navigating complex global markets, were caught off guard. “The worst thing in the oil market is uncertainty. We won’t dare touch the oil for now,” a top executive from a major Chinese trading firm told Reuters.

Industry insiders urge caution, emphasizing the need to assess how the tariff will be enforced and whether Venezuelan oil imports can be identified.

Impact on Chinese buyers: a pause in imports

Chinese traders reacted fast to the tax threat by suspending April Venezuelan oil supplies.

This decision mirrors a broader reluctance among independent refiners, sometimes known as “teapots,” which account for a sizable share of Venezuelan crude purchases.

Another trade executive said to Reuters that, “It’s a total mess,” the executive said. “China is already in a tariff war with the US. So be it.”

This uncertainty raises questions about the future availability and pricing of Venezuelan oil, further aggravating already strained trade connections.

Venezuela, a country in economic difficulty, relies significantly on Chinese imports, shipping nearly 503,000 barrels per day (bpd) to its largest customer, accounting for almost 55% of its oil exports.

The majority of these barrels are rebranded as Malaysian oil, complicating traceability of origin and compliance with international sanctions.

China’s opposition to ‘unilateral sanctions’

In response to Trump’s tariff threats, China again criticized unilateral sanctions by the United States.

”The United States has long abused illegal unilateral sanctions and so-called long-arm jurisdiction to grossly interfere in the internal affairs of other countries,” foreign ministry spokesperson Guo Jiakun told a press briefing.

This response from China’s government reflects both the current geopolitical tensions as well as showing the commitment of China to the energy procurement strategy, irrespective of the pressure on the one side from the US.

This changing environment adds another layer of complexity to the international energy dynamic, especially for countries with ongoing internal and external economic challenges, such as Venezuela.

The future of Venezuela’s oil trade remains uncertain

Chinese traders and refiners are in a vulnerable situation as the Venezuelan oil market remains unsettled as a result of Trump’s tariff threats.

The halt in imports reflects a deep-seated concern about the unpredictable nature of US foreign policy and its possible impact on critical energy supplies.

Looking ahead, resolving these conflicts will be critical not just for Venezuela’s economy but also for global oil markets, where a consistent supply from Middle Eastern sources is dependent on geopolitical connections.

With the future of Venezuelan oil exports in doubt, industry stakeholders will be keenly monitoring developments in the hopes of finding clarity in an increasingly volatile trade environment.

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