Exclusive Chinese Communist Party takes center stage in Iran-Venezuela oil trade – Reuters – Economy and Finance

Authors: Jonathan Saul, Chin Aizu, and Mariana Paraga

LONDON/SINGAPORE/MEXICO CITY (Reuters) – A Chinese logistics company has become a major participant in oil supplies subject to Iranian and Venezuelan sanctions, despite being blacklisted by Washington two years ago for its dealings with Iranian crude, seven people said they knew of the deal. Reuters.

Analysts said that the more prominent role of China Concord Petroleum Corporation (also known as CCPC) and its expansion in trade with Venezuela, which had not been reported before, highlighted the limitations of Washington’s restrictive regime.

A number of people described the details of these transactions to Reuters, including a Chinese source familiar with the company’s affairs, an Iranian official, and a source from the Venezuelan state oil company PDVSA.

According to PDVSA’s monthly shipping plans, export plans and invoices for April and May this year, as well as tanker tracking data and PDVSA sources, CCPC will participate in the Venezuelan oil trade this year through transactions with small independent oil refineries in China. .

PDVSA documents and oil tanker tracking data show that this Hong Kong-registered company is quickly becoming a major partner in Caracas, chartering ships in April and May, and carrying more than 20% of Venezuela’s total oil exports for the same period of nearly $445 million in crude oil. oil. The documents show that the CCPC did not charter any ships carrying Venezuelan oil in June.

After the United States imposed sanctions, many refineries around the world, including state-owned Chinese companies, stopped buying crude oil from Iran and Venezuela, slashing their exports by millions of barrels and billions of dollars in revenue.

Tehran and Caracas depend on oil revenues to run their countries, and subsequently played a well-designed cat-and-mouse game with Washington to continue exporting crude, using various techniques to avoid detection, including ship-to-ship transfers. Shell companies and brokers operating outside the US financial sector.

Two sources said that last year CCPC purchased at least 14 tankers to carry oil from Iran or Venezuela to China.

A person contacted by Reuters via CCPC’s registered phone number stated that he was unaware of any of CCPC’s business. She refused to reveal her name. An email sent to the company’s address listed on the US Treasury website was unanswered.

PDVSA and the Venezuelan Oil Ministry did not respond to requests for comment. Iran’s Oil Ministry also declined to comment.

In response to a question about the role of Chinese companies in sanctioned oil transactions, a Chinese Foreign Ministry spokesperson said: “China maintains normal and lawful trade with Iran and Venezuela under international law, which is worthy of respect and protection.”

China firmly opposes unilateral sanctions and urges the United States to repeal its long-term jurisdiction over companies and individuals. “

“flexible shaft”

US officials generally do not prohibit the shipment of Iranian or Venezuelan oil purchased from China or any international customer. But they can make it difficult for those involved in trade to operate by preventing US citizens and companies from doing business with them, making them untouchable in Western banks.

In 2019, Washington included the CCPC on its list of sanctioned entities for violating Iranian oil processing and trade restrictions. The company has not publicly commented on the sanctions and Reuters has not been able to determine the impact of the US blacklist on CCPC.

Three Chinese sources said that the Chinese Communist Party is supplying six Chinese teapot refineries with Iranian oil.

Due to the sensitivity of the matter, the exporter refused to reveal the identity or name of these refineries. The documents seen by Reuters did not include the name of the refinery.

Iranian officials familiar with the matter confirmed that the Chinese Communist Party is a major participant in the oil trade between Tehran and China.

According to data from Refinitiv Oil Research, China received an average of 557,000 barrels of Iranian crude per day from November to March, which is about 5% of the world’s largest importer’s 2018 total imports from Iran.

According to data from commodity tracking expert Vortexa Analytics, China’s imports of crude oil and fuel from Venezuela averaged 324,000 barrels per day at the end of April, below the pre-sanctions level, but still 60%. Venezuela. oil exports.

Sanctions against Venezuela’s PDVSA were implemented in 2019 as part of the overthrow of the country’s socialist president, Nicolás Maduro.

Asked about the CCPC’s major role in boosting oil trade between Iran and Venezuela, the US Treasury declined to comment, but said the agency would continue to work.

Julia Friedlander, a former US Treasury sanctions official, said the growing number of blacklisted oil deals shows opponents are getting better at avoiding them.

This shows that the impact of US sanctions is limited, especially when targeting multiple like-minded or selective participants, such as oil traders. Therefore, these flexible hubs will stimulate alternative,” said Friedlander, senior official. Member of the Atlantic Council’s Center for Geographical Economics.

According to public data from analysts and the PDVSA fleet, the sanctions severely affected the economies of Iran and Venezuela and severely affected the fleets of oil tankers, which were overcrowded and in need of major reforms.

The 14 tankers acquired by CCPC have a capacity of approximately 28 million barrels of oil. Two sources said at least another tanker is linked to China Petroleum, increasing its capacity to about 30 million barrels.

A Reuters poll showed that Iranian crude oil exports exceeded 600,000 barrels per day in June. According to an assessment based on tanker tracking data, before the sanctions were imposed, production in 2018 was 2.8 million barrels per day, up from 300,000 barrels per day in 2020.