Upgrader of the Petromonagas joint venture between PDVSA and the Russian state-owned Petromost (in which Rosneft was a partner). Photo: PDVSA Press
Guacamaya, May 12, 2025. In the last year, more than $1 billion worth of Venezuelan oil has been labeled as Brazilian crude upon arrival in China, according to the news agency Reuters.
This tactic has allowed traders and intermediaries to evade sanctions imposed by the United States. The new scheme not only reduces logistics costs and facilitates financing, but also makes oil trade between Venezuela and China more opaque, according to a Reuters investigation based on vessel data and industry testimony.
The investigation indicates that since July 2024, oil traders have been changing the label on their cargoes, making Venezuelan crude appear as if it came from Brazil. This has changed the shipping routes for sanctioned oil heading to China. Typically, Venezuelan crude had to make a stop in Malaysia before continuing its journey, but now, with this new tactic, the journey is shortened by four days and costly ship-to-ship transfers on the high seas are eliminated.
However, this move is not just a matter of logistics. Some ships have even altered their tracking signals to show they were departing from Brazilian ports when, in fact, they were departing directly from Venezuela. This has been corroborated by satellite imagery and analysis by TankerTrackers.com. These maneuvers have been used by ships contracted to Hangzhou Energy, which has been operating with the Venezuelan state-owned oil company PDVSA for a couple of years.
A good example of this is the tanker Karina, which, under the name “Katelyn,” loaded 1.8 million barrels of Merey 16, Venezuela’s most well-known crude, while sending a false signal that it was in Brazil. It later unloaded its cargo at the Chinese port of Yangpu in April 2025.
China, which normally imports crude oil from Brazil, especially pre-salt crude, which is a lighter type of oil, does not typically receive this type of bituminous mix from Brazil; this is a residue used to make asphalt. However, between July 2024 and March 2025, Chinese customs reported the import of this apparent “Brazilian bitumen” worth $1.2 billion, equivalent to approximately 67,000 barrels per day. Petrobras, the Brazilian state-owned company, has denied that this type of product is exported to China.
By classifying Venezuelan crude as mixed bitumen, independent refineries in China can import it without government permits, thus avoiding certain regulations. Furthermore, by using false certificates of origin, traders can more easily access financing, which is essential for a voyage that can last up to two months.
Experts such as Asdrúbal Oliveros and Jesús Palacio Chacín, in their book “On Sanctions in Venezuela,” mention that:
“That is why, although the establishment of licenses for Western partners in the industry is a decision with political costs in the US and Venezuela, it has become the only way to limit the opacity of disinformation schemes regarding the destination of shipments, the reference prices for our barrel, and the actors involved in financial triangulations to evade sanctions. This entire system strengthens irregular and illicit schemes, increases the influence of China and Russia in the region, and does nothing to lower global oil prices.”
These aforementioned maneuvers have increased due to the lack of regular channels for the trade of Venezuelan oil. After the Biden administration granted certain licenses that were later canceled by Trump, many legal options were closed. This has fueled a black market and strengthened the influence of countries like China and Russia in the region, while making it more difficult to know the price and where Venezuelan crude oil is going.
Nicolás Maduro’s government has been under sanctions for years and has repeatedly accused the US of launching an “aggression” against the country. However, the increase in these clandestine operations suggests that these sanctions have not halted Venezuelan crude oil exports, but rather forced the industry to adapt and move toward more opaque practices that evade regulations. They also reduce the country’s revenues because the black market demands discounts on crude oil sales.
Recently, Venezuelan Vice President Delcy Rodríguez made an official visit to China to strengthen relations between the two countries, seek investment, and ensure the flow of oil to the Asian country. The Venezuelan government has had frequent disagreements with Reuters over its coverage of the Venezuelan oil situation, indicating the ongoing tension in this relationship regarding reporting.
