State-owned Chinese company PetroChina has informed traders of its unwillingness to buy Venezuelan oil, despite the fact that the export of crude from Venezuela is now under US control. According to Reuters, PetroChina’s cautious approach suggests that the company aims to assess evolving market conditions more thoroughly. This implies that other Chinese buyers who previously acquired inexpensive Venezuelan crude will likely act similarly.

PetroChina, part of the CNPC group, was the largest purchaser of Venezuelan oil until 2019, when President Trump imposed sanctions. The current refusal by the Chinese company comes amid a reassessment of the price of Venezuelan crude. Trading houses Trafigura and Vitol have started selling oil at significantly higher prices. Compared to $15 in December, discounts to Brent crude have narrowed to just $5 per barrel. Experts consider the current price to be uncompetitive, as Venezuelan crude is losing ground in terms of price against Canadian and Iranian oil.

Traders believe that shipments of Venezuelan oil to China will plummet in February. The main buyers have been small private refiners for whom price has been a critical factor despite the risks associated with sanctions. As prices rise, demand collapses. In contrast, Russia intends to continue its cooperation. According to Sergey Melik-Bagdasarov, Russia's ambassador to Venezuela, the arrest of President Nicolas Maduro will not affect Russian oil companies' operations with Venezuelan enterprises. Furthermore, no one has suggested canceling agreements on crude production.