The United States’ Gulf Coast refineries were built to handle heavy sour crude, and now they’re getting more of it, a lot more, from Venezuela. China isn’t happy.
Now, in ordinary times, China can replace those barrels without much trouble, but in a future crisis, Beijing now starts with one less piece on the board.
At the end of 2025, China was still taking a large share of Venezuela’s crude. Vortexa estimated shipments at roughly 470,000 barrels per day during the year, about 4.5% of China’s seaborne crude imports, while internal PDVSA shipping data put exports to China closer to 642,000 barrels per day. The difference partly reflects years of Venezuelan crude moving through middlemen and appearing under other origins in Chinese customs data. The dark fleet is gonna dark fleet, after all. Either way, hundreds of thousands of barrels of discounted Venezuelan heavy crude were moving east, much of it to independent Chinese refiners.
Obviously, that traffic changed quickly in January 2026. A raid by U.S. special forces has a tendency to be disruptive, and this proved no different. Two China-flagged supertankers sailing toward Venezuela to collect crude associated with debt repayment turned around and headed back toward Asia, and by August 28 S&P Global reported that China had taken no Venezuelan barrels since December 2025.
Venezuela kept exporting. In August, shipments averaged about 1.17 million barrels per day, including 553,000 to the United States, 297,000 to India and 260,000 to Europe. Chevron exported about 286,000 barrels per day from its Venezuelan operations, while Vitol and Trafigura together handled roughly 597,000. The barrels did not disappear. New buyers and traders simply took over a trade that had pointed heavily toward China.
The Treasury has since put that shift into the rules governing the market. General License 46D, issued August 27, allows an “established U.S. entity” to lift, buy, market, transport, sell and resell Venezuelan oil under specified conditions. The license excludes transactions with Venezuelan or U.S. entities owned or controlled by Chinese persons, along with entities operating joint ventures with them, although OFAC allows an established U.S. company to resell Venezuelan crude to a Chinese buyer.
China can therefore still buy Venezuelan oil through the authorized trade, but Treasury now sets the terms of that channel and Chinese firms face explicit barriers on the Venezuelan side. Companies selling the oil outside the United States also have to report the parties, quantities, values and ultimate destinations to the U.S. government. Washington now gets a fairly detailed look at a trade Beijing once accessed much more directly, and with far less scrutiny.
China had much more invested in Venezuela than the cargoes. Sinopec and CNPC held some of the largest foreign oil positions in the country; Reuters identified roughly 2.8 billion and 1.6 billion barrels of entitlement reserves respectively, and CNPC remained a producer through the Sinovensa venture after it stopped lifting crude directly in 2019. China Concord Resources was still expanding in Venezuela in 2025, bringing a floating production facility to Lake Maracaibo for a project worth more than $1 billion that aimed to raise output at two fields from roughly 12,000 to 60,000 barrels per day and send the crude to China.
North American Blue Energy Partners has now taken over some of those positions. NABEP received 100-year rights covering 17 Venezuelan fields with roughly 65 billion barrels of reserves, and Reuters reported that Chinese and Russian firms, including China Concord, Sinopec and CNPC, had operated several of them. The U.S. government holds a 35% stake in NABEP through warrants structured to protect that position from dilution, along with access to 20% of production at cost and preferential rights over additional barrels.
President Trump made the strategic purpose unusually explicit when he announced the agreement on August 28. The White House subsequently called it the “biggest oil deal in world history,” said it gives the United States majority control over more than 65 billion barrels of Venezuelan reserves, and emphasized that most of the additional fields moving under NABEP had previously been controlled or operated by Chinese and Russian firms. The administration says NABEP could invest as much as $100 billion in Venezuelan oil infrastructure, with millions of barrels of additional production eventually processed through U.S. refineries. The precise legal meaning of “majority control” is more complicated than the White House formulation suggests, but the administration is leaving little ambiguity about what it wants the agreement to accomplish: move a major Venezuelan reserve base out of adversaries’ hands and into a U.S.-led commercial system.
Beijing noticed. Chinese Foreign Ministry spokesman Guo Jiakun responded on September 1 that China-Venezuela cooperation enjoys protection under international law and the laws of both countries and that China’s legal rights and interests in Venezuela “must be guaranteed.” Washington appears to have reached a rather different conclusion about who gets to decide what those interests are worth.
China also still has billions of dollars tied up in Venezuela. Chinese creditors committed roughly $106 billion between 2000 and 2018, much of it through arrangements linked to oil repayment, before Beijing stopped making large new commitments and began reducing its exposure. Estimates place Venezuela’s remaining Chinese debt at roughly $10 billion to $15 billion. PDVSA records reviewed by Reuters show that only a small share of the roughly 642,000 barrels per day sent toward China in 2025 directly serviced debt; most of the trade had long since become ordinary oil commerce.
China depends heavily on imported crude, with EIA putting the seaborne share of those imports at 92%. Venezuela offered Chinese companies a politically friendly reserve base large enough to support decades of investment and much more production than the country delivers today. It spread Chinese petroleum interests beyond the Persian Gulf and western Pacific, even if a trans-Atlantic supply line would remain exposed to U.S. pressure during a conflict.
The United States now occupies more of that position. U.S.-approved companies handle a growing share of exports, American producers are expanding, and the NABEP agreement puts the U.S. government directly into fields that include former Chinese positions. Chevron announced on September 2 that it plans to invest $7 billion and double its Venezuelan production to about 600,000 barrels per day over five years. Eni is also expanding, including a new 25-year production-sharing agreement for the Junin 5 heavy-oil project.
None of this turns Venezuela into an instant energy superpower, but it sets it back on the firm trajectory of the 90s and early 2000s of a true Western Hemisphere Petrostate. The country still produces only about 1.1 million to 1.2 million barrels per day, and years of underinvestment have left terminals, upgraders and upstream infrastructure needing extensive work. Raising output by millions of barrels will take years of construction and capital. Lawyers and energy analysts have also questioned the NABEP agreement’s legal basis, contract structure and lack of competitive bidding. Its 65 billion barrels remain underground, and Venezuelan politics will continue to matter to contracts stretching out for a century.
A year ago, several hundred thousand Venezuelan barrels were still moving toward Chinese buyers, Chinese companies held producing and prospective field positions, and new Chinese capital was funding projects designed to send more crude east. By September 2026, U.S.-approved sellers controlled the authorized path for Chinese purchases, Chinese tankers had withdrawn from the old trade, Chinese operators had lost positions in fields now tied to a company partly owned by the U.S. government, and Western capital was moving into the same production base.
It remains to be seen how quickly Venezuela can recover from decades of socialism and neglect. The damage is enormous, and rebuilding an oil industry that was systematically hollowed out will take years. But Venezuela still has the resource base, Western capital is returning, and for the first time in a generation the country is moving toward a very different economic relationship with the United States. That should offer some genuine optimism for Venezuela’s future. For China, the picture is simpler: one of the world’s great oil reserves is moving back toward the Western economic orbit, and Beijing now has one less piece on the board.