U.S.-Venezuela Oil Deal Threatens China’s Oil-Backed Loans
For decades, Venezuela has been one of China’s most important partners in Latin America and the largest recipient of Chinese government funds in Latin America, with Beijing lending Caracas tens of billions of dollars and accepting oil as repayment. Chinese policy banks provided it with at least $60 billion in oil-backed financing through 2015, while broader estimates of Chinese lending and…
A recent $1 billion agreement between Venezuela and North American Blue Energy Partners threatens China's longstanding oil investments in the Latin American nation. The deal, which grants the U.S.-backed producer 35% ownership of 17 Venezuelan oil fields, significantly reduces China's ability to influence production, pricing and debt repayment.
Chinese policy banks have provided Venezuela with at least $60 billion in oil-backed financing since 2015, with estimates of total Chinese lending surpassing $100 billion. The transfer of these fields to U.S.-aligned interests could result in financial, commercial, and geopolitical losses for Beijing, as China currently buys an estimated 50-89% of Venezuela's oil exports.
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