VENEZUELA’S CUSTOMER BASE
Because the first spherical of sanctions in opposition to Venezuela’s oil trade in 2019, its buyer base has narrowed to simply two international locations: The US (the place exports are often allowed underneath a particular waiver) and China, the one nation with the monetary and political muscle to flout Washington’s sanctions regime.
The important thing gamers listed below are the so-called teapot refiners, a set of privately owned crops which cluster in Shandong province south of Beijing. They’ve attracted a popularity through the years for surviving by the pores and skin of their tooth whereas competing with higher linked, higher capitalised state oil corporations.
They’ve been crucial shoppers of Venezuelan crude for years. Till about 2021, they had been keen consumers of the nation’s thick, viscous product – unattractive to many refiners, as a result of it’s exhausting to course of – because of its suitability for producing asphalt for highway surfaces and roofing. Shandong’s refineries churn out about 40 per cent of the overall, a very good commerce when China’s actual property growth was at its top.
When the property bubble burst in 2021, that commerce slumped to barely greater than half of the place it was at its 2020 peak – however the teapot refiners discovered a special approach. By shopping for sanctioned oil from Venezuela, Iran and Russia at steep reductions to regular costs, they’ve managed to proceed eking out the thinnest of margins.
