NEWS

Venezuela Sells Millions Of Barrels Of Crude Oil To China

Millions of barrels of Venezuelan heavy crude embargoed by the United States have been adulterated for shipment to China, according to a Bloomberg investigation. 

These illegal maneuvers were carried out by a group of companies, which Washington had already sanctioned. This U.S. news portal claims to have reviewed invoices and e-mails that show that several traders have hidden the origin of the crude oil with chemical additives and by changing their name on the documentation to be sold without anyone knowing that it comes from Venezuela.

Although the United States cannot prohibit China from importing Venezuelan oil, it can impose economic sanctions on companies that conspire to allow the South American country’s crude to reach the Asian country.

Due to the embargo, companies stopped acquiring crude legally since 2019, and some started to do so clandestinely. “There are so many ways to circumvent sanctions; there are many people willing to take the risk because there’s so much money to be made,” said   Scott Modell, managing director at Rapidan Energy Advisors LLC, in a Bloomberg report.

According to the report, some crudes loaded in Venezuela (among them one called ‘Hamaca’) are treated with chemical additives off the coast of Singapore and then reappear on the market under the name of ‘Singma’ or simply a bituminous mixture.

Among the companies involved is Swissoil Trading SA. The Geneva-based house made some of the transactions seen in the documents acting on behalf of Mexican oil company Libre Abordo SA.

Although the Swiss company denied that it was trading or had traded crude from the Latin American country, the investigation revealed documents of at least 11.3 million barrels of Venezuelan oil that the company sold and delivered to China last year under the guise of other names.

However, all indications are that Swissoil Trading SA is not the only one involved. Customs data indicated that other companies are also involved in the alteration of crude oil and that more than half of Venezuelan oil exports last year ended up in China.

In April 2020, the vessel Celestial took on Venezuelan crude oil in a transshipment off Malaysia. It sailed to an area a few miles off the coast of Singapore, and there received 30 containers of chemical additives at the cost of US$233,000, money that was paid by Swissoil. 

Subsequently, the Celestial cargo was renamed “Singma Blend” (a name combining the words Singapore and Malaysia). A month later, the oil was sold to Hong Kong-based Dayuan Import & Export Co Ltd middleman in China.

While it is not illegal to use chemical additives, it is prohibited to hide the place of origin of crude oil and change its name. For this reason, Swissoil and its chief executive Philipp Apikian, among other traders, were sanctioned by the Treasury Department on January 19.

Readers Bureau, Contributor

Edited by Jesus Chan

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