Trump seizes Venezuelan oil, threatening Chinese debt
China faces mounting losses as President Donald Trump moves to redirect Venezuelan oil exports away from Beijing, jeopardizing billions in unpaid debt and eroding Chinese influence across Latin America. Trump announced Tuesday that Venezuela will hand over 30 to 50 million barrels of oil to the United States, with Washington controlling the revenues valued at $2.8 billion. The step follows U.S. forces' dawn capture of Venezuelan President Nicolás Maduro on January 3, after which Trump stated America would temporarily "run" Venezuela and restructure its oil sector.
Since 2007, China has extended over $60 billion in loans to Venezuela, with about $10 billion still outstanding. Beijing received repayments via oil shipments, directing roughly 80 percent of Venezuelan exports its way though this accounts for only 4 to 5 percent of China's total crude imports. Shares of Chinese oil firms tumbled post-U.S. operation: CNOOC dropped 3.8 to 4 percent, PetroChina fell 3.3 to 5 percent, and Sinopec declined 1.5 to 1.9 percent in Hong Kong trading Monday.
The Trump administration reportedly demanded Venezuela "expel China, Russia, Iran, and Cuba" and partner exclusively with the U.S. on oil production. Chinese Foreign Ministry spokesperson Mao Ning condemned these demands Wednesday as "typical bullying" and a violation of Venezuelan sovereignty. Chinese refiners now scramble to replace heavy Venezuelan crude with supplies from Iran or Russia, per traders. This shift challenges processors calibrated for Venezuelan heavy oil, which yields up to 60 percent asphalt versus 10 to 13 percent from Iranian alternatives.
"China and other countries have legitimate rights in Venezuela that must be protected," Mao stated Wednesday. Beijing strongly denounced Maduro's capture as a breach of international law, though analysts expect limited response beyond diplomatic protests. The crisis endangers China's Belt and Road Initiative presence in Latin America, where Venezuela ranked as Beijing's largest debtor and most loyal political ally. Over 20 Latin American countries joined the infrastructure program, with Chinese development banks pledging more than $120 billion in regional loans.
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