PetroChina Pauses Venezuelan Crude Purchases Amid US Export Control
Beijing, Tuesday, 27 January 2026.
Following Washington’s seizure of Venezuela’s export operations, PetroChina has suspended purchases. Consequently, the deep discounts Chinese buyers previously enjoyed have shrunk by approximately $10 per barrel.
Market Intermediaries and Price Erosion
This erosion of value is largely attributed to the entry of major trading houses Trafigura and Vitol, which began marketing Venezuelan oil in January 2026 following an agreement between Caracas and Washington[1]. While discounts for cargoes leaving Venezuela stood at roughly $15 per barrel in December, Vitol has recently offered Venezuelan oil for April delivery at a discount of only about $5 per barrel relative to ICE Brent[1]. Facing these tightened spreads and new compliance hurdles, PetroChina has instructed its traders to suspend purchases and trading of Venezuelan crude until further notice[1]. The shift has forced China, formerly the largest single buyer of Venezuelan oil, to confront a market where offers are no longer competitive compared to other grades such as Canadian crude[1].
Redirected Flows and US Oversight
The United States now exercises control over 50 million barrels of Venezuela’s export volume, a strategic leverage point established after the capture of President Nicolas Maduro on January 3, 2026[1]. As of January 22, intermediaries had already executed sales to Western refiners, including Valero, Phillips 66, and Repsol, effectively redirecting flows that previously fed Chinese demand[1]. Consequently, China has condemned the U.S. for this diversion, noting that Venezuelan supplies—which account for about 4% of China’s overall energy structure—are being routed away from Beijing[1][4]. The logistical bottleneck is already evident; by the end of December 2025, PDVSA’s onshore storage facilities were 45% full, holding 21.6 million barrels, with an additional 17 million barrels awaiting departure[4].
Legislative Overhaul and Financial Fallout
Amidst these export disruptions, Venezuela is attempting to overhaul its legal framework to court international capital. Today, January 27, 2026, lawmakers are expected to approve a reform to the hydrocarbon law proposed by Interim President Delcy Rodriguez[2]. The legislation seeks to lower royalty rates from the current 33% to as low as 15%—a reduction of 18 percentage points—and provide joint-venture partners with greater operational control[2]. These measures are designed to attract the $100 billion in investment that U.S. officials state is required to reconstruct the nation’s energy infrastructure[2].