US intervention shifts Venezuelan oil control, China loses ground

By Emre Aytekin and Gokhan Ergocun

BEIJING (AA) - Venezuela, where the US detained the president through a military intervention, was among the countries with which China had established close ties in Latin America and the Caribbean, providing economic support against Washington’s sanctions.

Following the American intervention, the transfer of Venezuelan oil to Washington’s control means not only a loss of economic interests for China but also the loss of a strategic position in global power competition.

The US military intervention on Jan. 3, which detained Venezuelan President Nicolas Maduro and his wife, created uncertainty over the use of the country’s economic resources, particularly oil, and raised critical questions about the future of China’s political influence and economic interests in Venezuela.

Prior to the intervention, China, the most important buyer of Venezuelan oil, provided billions of dollars in financing under oil-for-credit programs while elevating political relations to a “strategic partnership under all circumstances.”

China was among the countries whose political and economic relations with Venezuela developed most rapidly under US sanctions. During this period, Caracas, receiving significant support from Beijing, exported a large portion of its oil to China in exchange for debt relief and credit.

- Oil trade

Venezuela holds the world’s largest proven oil reserves, estimated at 303 billion barrels, accounting for around 17% of global proven reserves.

The country, which produced 3.5 million barrels of oil per day in the 1970s, saw daily output fall to 1.1 million barrels last year due to governance problems, lack of infrastructure investment, and the impact of sanctions.

During this period, Venezuela’s share of global oil production dropped from 7% to 1%.

While Venezuela was under US sanctions, China became its most important oil buyer, importing an estimated average of between 300,000 and 470,000 barrels per day.

According to data from Venezuela’s national oil company, Petroleos de Venezuela s.a. (PDVSA), the country exported 952,000 barrels per day in November, before the US military blockade that began in December 2025. Of that amount, 778,000 barrels were sent to China, giving Beijing an 81.7% share of Venezuela’s oil exports.

China, the world’s largest oil importer, sources most of its oil from the Middle East and Russia, with Venezuelan crude accounting for about 4% of total imports.

As Venezuelan oil is subject to sanctions, it does not appear directly in China’s official import figures and is believed to be shipped indirectly other countries.

While China’s major state-owned oil companies avoid processing Venezuelan crude due to sanctions risks, the oil is refined by smaller independent “teapot" refiners, most of which are located in Shandong province on the Yellow Sea coast, according to multiple news reports.

China does not recognize US sanctions and has described them "illegal, unjustifiable and unilateral" and as well as an overreach of jurisdiction by the US.

- Investments and loans

Chinese companies are among the few foreign investors still active in Venezuela’s oil sector. According to the American Enterprise Institute, China has invested $2.1 billion in Venezuela’s oil industry since 2016.

Morgan Stanley data show that China National Petroleum Corporation (CNPC) holds stakes in consortiums with concessions covering 1.6 billion barrels of oil, while China Petroleum & Chemical Corporation (Sinopec) holds stakes covering 2.8 billion barrels.

Some Chinese private firms also maintain large-scale investments in oil extraction.

According to AidData, a US-based research organization, China provided Venezuela with $106 billion in loans, debt, and capital investments between 2000 and 2023.

The China Development Bank alone extended $60 billion in loans under oil-for-credit programs launched in 2007, allowing Venezuela to access oil revenues outside the petrodollar system.

Venezuela is currently estimated to owe China between $17 billion and $19 billion in outstanding loans.

- Strategic partnership 'under all circumstances'

Amid international sanctions, political instability, and economic crisis, Caracas increasingly turned to China to develop oil and infrastructure investments and escape international isolation.

During Maduro’s visit to China in 2023, bilateral relations were elevated to a “strategic partnership under all circumstances,” and Maduro sought Beijing’s support for Venezuela’s participation in the expanding BRICS bloc.

China viewed Venezuela both as a source for diversifying energy supplies and as a key partner amid intensifying geopolitical rivalry with the US.

In an interview with Xinhua ahead of the visit, Maduro described China as “the superpower of the 21st century,” saying it represented a non-imperialist and non-hegemonic global power.

- US intervention and great power competition

Following the US intervention, international media commentary suggested the operation was aimed at curbing China’s growing influence in Venezuela and the wider region as part of broader global power competition.

Beijing condemned the use of force against a sovereign state and its leader, calling for the release of Maduro and his wife and an end to efforts to overthrow the Venezuelan government.

Chinese officials said that regardless of political changes in Venezuela, China would continue economic cooperation, stressing that its investments are protected under domestic and international law.

Given Venezuela’s relatively small share in China’s overall oil imports and overseas investments, Beijing is not expected to impose countermeasures if its interests are affected.

US President Donald Trump’s revival of the Monroe Doctrine as part of his national security strategy, aimed at reinforcing US dominance in the Western Hemisphere, could open new fronts of tension in global competition with China.