PetroChina Proposes to Resume Venezuelan Oil Imports Following US Sanctions Lift, Amid Venezuela's Struggling Oil Export Recovery

PetroChina aims to purchase up to 8 million barrels monthly from Venezuela's state-run oil company PDVSA, after a four-year pause due to US sanctions, marking a significant shift in the global oil market dynamics.

• PetroChina, China's second-largest oil refiner, plans to buy up to 8 million barrels a month of Venezuelan crude from state-run oil company PDVSA, renewing a trade paused four years ago due to U.S. sanctions.
• Following the temporary lifting of the US sanctions on Venezuela by the U.S. Treasury Department in October, Venezuela could resume exporting crude, gas, and fuel. The six-month reprieve is contingent on basic democratic processes taking place within the Venezuelan government.
• PetroChina aims to pay in yuan for about 265,000 barrels per day of Venezuelan crude through its joint ventures with PDVSA. Before the sanctions, it had been procuring up to six 2 million-barrel cargoes of Venezuelan oil per month.
• PetroChina's proposal for oil import has not been finalized yet, as PDVSA is currently unable to meet the 265,000 barrels per day commitment. Venezuela's crude output has only slightly increased this year to 780,000 barrels per day, falling short of the projected 1 million barrels per day.
• Negotiations are underway to align transaction modes. While PetroChina moots open credit or letters of credit, PDVSA prefers any new deal to include prepayment in cash or oil swaps. The final agreement must occur within the six-month window provided by the lifted US sanctions.

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