Geopolitical Tensions Force China-Bound Supertankers to Turn Back from Venezuela

Two China-flagged supertankers bound for Venezuela to pick up crude oil as part of longstanding oil-for-debt arrangements have abruptly turned back and are now sailing back toward Asia, according to the latest LSEG shipping data, highlighting fresh uncertainty in global energy flows amid tight U.S. sanctions and political turmoil.

The China-bound supertankers Xingye and Thousand Sunny, which had been anchored for several weeks in the Atlantic Ocean off Venezuela’s coast awaiting further orders, changed course after plans to load Venezuelan crude that would help service Caracas’s debt to Beijing stalled amid the ongoing U.S. oil embargo on Venezuela.

China has traditionally been Venezuela’s largest oil customer, buying a significant share of the country’s crude exports and receiving oil cargoes in lieu of debt repayment under a long-standing arrangement negotiated with Caracas after U.S. sanctions in 2019. However, direct shipments from Venezuela to Chinese ports have not arrived since last month, as Washington continues to enforce its embargo.

Last week, the U.S. administration announced a US$2 billion export deal for up to 50 million barrels of Venezuelan oil previously stuck in storage and stated that China would not be deprived of Venezuelan crude. But the mechanism for ensuring continued crude flows to China remains unclear, and shipping data suggests that the direct Venezuela-to-China oil route remains highly constrained by geopolitical risks and sanctions enforcement.

The reversal of these supertankers underscores mounting challenges for Venezuela’s oil exports at a time when the country is navigating a complex political crisis and the U.S. maintains pressure to block certain energy transactions. This unexpected pivot is likely to affect global oil supply dynamics, further complicating efforts to stabilize crude flows amid sanctions and rising geopolitical risks.