Petrochina stopped importing 5 million barrels of Venezuelan oil

- Aug 22, 2019-

Reports say China national petroleum corporation (CNPC) has suspended oil purchases from venezuela.After all, China national petroleum corporation also suspended oil imports from Iran.What's this time around?

| suspended Venezuelan oil imports

Venezuela is China's seventh largest trading partner in Latin America and the second largest source of oil imports, and oil trade plays an important role in bilateral trade.

In the first half of this year, China imported 8.67 million tons of oil from venezuela, or 350,000 barrels a day, or about 3.5 percent of China's oil imports.

However, there have been reports recently that petrochina has suspended oil imports from venezuela.Petrochina is the only Chinese company still importing Venezuelan oil, which means China has stopped importing Venezuelan oil.

Petrochina has stopped importing Venezuelan oil since August, lianhe zaobao reported.

Bloomberg also reported that petrochina had canceled plans to ship about 5 million barrels of Venezuelan oil in August.And the three cancelled shipments have not yet attracted other buyers.

Why did | suddenly stop importing?

It is the first time in nearly a decade that petrochina has stopped buying oil from venezuela.So why the sudden halt?

First, the U.S. sanctions against venezuela.The United States has imposed several sanctions on venezuela since last year.Earlier this month, Mr. Trump signed an executive order freezing all Venezuelan government assets and property interests in the United States, requiring them not to be transferred, paid, exported, withdrawn or otherwise disposed of.The main targets of the order are venezuela's central bank and the state oil company (PDVSA).

Escalating us sanctions have deterred companies from doing business with venezuela.Due to its large scale of international business, petrochina cannot do without the us dollar payment and clearing system, and it also trades in the us market with the American depositary receipt, so it is difficult to avoid the influence of us policies.

Second, while venezuela has the world's largest remaining proven oil reserves, its output is not as high as that of other oil producers.Venezuela's oil production, which began falling in 2006, fell below 1m b/d in March, a 16-year low.

Although China has been importing Venezuelan oil for the past seven months, Venezuelan production has been declining and the country has run out of oil supplies to export.

Finally, people familiar with the matter said that the Chinese side suspended the purchase of Venezuelan oil after the consultation between the two countries.

| had suspended Iranian oil imports

It is worth mentioning that petrochina also suspended Iranian crude oil imports in the first half of this year.

China has been Iran's biggest oil buyer since the sanctions.China has repeatedly stressed that it will not stop Iranian oil imports.But petrochina stopped buying Iranian oil in May.

In the article "Chinese oil giant stops buying Iranian crude, South Korea will stop importing from may?"To prevent unnecessary trouble, sinopec and CNPC did not order Iranian crude for shipment in May.

China is Iran's largest crude oil customer, importing 475,000 BPD in the first quarter.Iran's oil exports have been affected by the suspension of purchases by two Chinese oil giants.Chinese oil imports to Iran hit a record low in June, pushing Iranian oil exports down to 100,000 barrels a day.