U.S.–Venezuela Oil Deal Sends Prices Lower, Draws Sharp Chinese Criticism
GeokHub
Jan 7 — GeokHub Global oil prices dipped on Wednesday after the United States announced a new oil agreement with Venezuela that would redirect crude shipments previously bound for China, triggering a rebuke from Beijing.
Under the deal, Venezuela is expected to divert up to $2 billion worth of sanctioned crude to the United States, part of Washington’s broader strategy to revive Venezuelan oil production and integrate it into Western markets. President Donald Trump said the arrangement would allow the U.S. to refine and sell Venezuelan oil at market prices and oversee how the proceeds are used.
Traders responded to the prospect of increased supply by pushing crude benchmarks down by about 1 %, reflecting market expectations that the deal could ease tightness in global crude availability.
China Condemns Move as ‘Bullying’
China—a long‑time major buyer of Venezuelan oil—criticised the deal, with a foreign ministry spokesperson denouncing the U.S. action as “typical acts of bullying” that violate Venezuela’s sovereignty and harm the rights of its people. Beijing has indicated it may shift its crude purchases toward other suppliers, such as Iran and Russia, as Caracas reroutes exports.
The agreement comes amid heightened geopolitical tensions following the U.S. military capture of Venezuelan leader Nicolás Maduro. While the interim Venezuelan government led by Delcy Rodriguez balances cooperation with both Washington and its traditional partners, Caracas has not formally confirmed the oil deal.
Market Implications
Analysts say the supply shift could weigh on oil markets in the near term, especially if cargoes formerly destined for Asia are sold into U.S. refineries instead. Chinese independent refiners, historically significant buyers of Venezuelan heavy crude, may increasingly turn to alternatives such as Iranian crude to fill the gap.
