China’s Oil Hunger Fuels Venezuela’s Crypto Shift
- Martin Brown and Carlos Ricaurte-Orozco
- Dec 9
- 5 min read
In Late November, President Trump has announced Venezuela contain a no-fly zone, further growing tensions between the U.S. and Maduro regime. Since September, the U.S has launched 21 strikes against suspected drug vessels, killing 83 people, also amassing more than a dozen U.S. warships and 15,000 troops near Venezuela. Previously, on March 24th, 2025, D.C enacted a 25 percent tariff on nations importing oil from Caracas.
Venezuela's oil is a major revenue source as the country holds one of the largest oil deposits in the world. Venezuela is estimated to contain 303 billion barrels of oil, with 85 percent of revenue in petrochemical production. This monopolization in the revenue accompanied with the collapse of the Bolivar in the international market has forced Maduro to utilize cryptocurrency to adapt with increasing Chinese demand for Venezuelan oil. A demand further exemplified between 2024-25 within the average volume of Venezuelan crude imported by Beijing, going from 351,000 barrels per day of oil (bpd) to 463,000 bpd by 2025.
Facing a collapsing currency and restricted access to traditional financial systems, Maduro turned to cryptocurrency as a lifeline. Petroleos de Venezuela (PDVSA) uses cryptocurrency as a new revenue stream, with the most common tool known as Tether. Developed by its parent company Tether Limited in 2014, Tether has become the leading cryptocurrency for oil transactions with China. According to the Wall Street Journal, PDVSA has been demanding Tether for oil shipments after Maduro passed the “Anti-Blockade Law” to “protect its transactions”.
Understanding Tether’s unique stability helps explain why it became central to Venezuela’s oil trade. Maduro’s usage of Tether is not at all random. Tether has a market cap of around $160 billion, placing it in a fourth spot globally in terms of market shares. Unlike other cryptocurrencies, Tether is a "stablecoin". Stablecoins maintain a constant value, but vary price due to the specific time and purchases, with currencies like the U.S. Dollar and Chinese Yuan supported through a 1-to-1 pegged price. This makes it ideal for long-term transactions, as its success is directly tied to the stability of widely used coins. The U.S. dollar takes on renewed importance in the process, due to its significance as the main currency in this trade, proven by connections between the U.S. dollar international price and overall oil prices. In essence, despite the anti-American nature of Maduro´s Regime, it relies on the U.S. Dollar to subsist, and it is turning to alternatives such as Tether to get it.
As noted prior, Maduro uses Tether as an intermediary for Beijing’s demand of oil. For the year 2025 alone, forecasts project around 559 Million Metric Tons (MMt) of crude oil being imported by China. In comparison, Saudi Arabia, second largest global oil producer, only produced 510 MMt in 2024.
The bulk of these PRC-affiliated buyers have had a long-standing presence and collaboration with Maduro through deals with PDVSA. While this ensures that the bulk of the collaboration remains encased in the Chinese petrochemical sector, there are major outliers for other industrial sectors. China National Petroleum Corporation (CNPC) have had long-standing presence in Venezuela despite caution due to sanctions.
This growing demand builds on a long history of Chinese investment in Venezuela’s oil sector. Prior to sanctions, in 2013, CNPC signed with PDVSA for a $4 billion loan called the “Petrolera Sinovensa” joint venture. The loan is intended to expand Sinovensa's bpd rates from the construction of the “Morichal Operational Complex”. Sinovensa, being a shared PDVSA-CNPC venture, produces around 105,000 bpd.
The China Petroleum and Chemical Corporation (SINOPEC) has concentrated its efforts within Venezuela's crude rich Orinoco Belt, aiming to produce $80 billion in oil revenues. Since 2010, SINOPEC has centralized efforts around the Junin 1 and Junin 8 Oil Blocks within the Orinoco Belt, by Memorandums of Understandinga done with PDVSA. These two oil Blocks have an estimated production of 400,000 bpd. The Junín 1 Block alone represented an investment of $14 billion, according to the former PDVSA president, Rafael Ramirez.
Beyond oil extraction, China has expanded its footprint through financial and industrial partnerships. Excluding the oil sector, Beijing intends to double-down in Venezuela, utilizing Tether. As of August 2025, China Aerospace Science and Industry Corp (CASIC), has acquired an estimated 25 million barrels of oil for $1.5 billion. Within the financial and private sector, major Chinese development and state-owned banks have worked either directly or indirectly with Maduro via loans, contracts, and barter agreements. The Chinese Development Bank (CDB) has been a significant lender to the BANDES, the Venezuelan public development bank, loaning them a sum of $5 billion in 2015. Meanwhile, PDVSA awarded contracts to the Anhui Erhuan Petroleum Group, a PRC private wholesale distributor, for production in the Ayacucho 2 Block of the Orinoco Belt. The purchase and investment by Anhui is planned at a planned $6 billion for Ayacucho 2.
As previously mentioned, the PRC is no stranger to joint ventures, causing further large transactions and providing more leeway for Tether. China Concord (CCRC), signed a joint-venture with PDVSA, finishing the construction of Venezuela´s first floating offshore oil rig within Lake Maracaibo. As of September 2025, the CCRC had an expected cost of $1 billion for the rig's construction. The active floating oil rig became operational by a 20-year production contract signed in 2024.
Overall, the intense demand of petrochemicals has caused the Maduro regime to move from historical streams of petrodollars. Having suffered revenue crashes in differing episodes such as the 2014-16 Oil Price Collapse, 2017-19 Production Decline and 2020 COVID-19 Price Crash, Maduro is clinging on to whatever financial stability he can find. Yet, Tether does not represent Venezuela´s sole dabble into the world of crypto. The Petro, a domestically-produced crptocurrency, was unveiled as an attempt to evade U.S. sanctions. Nonetheless, the failed experiment of the Petro in 2019-20 leaves Maduro with few options.
Venezuelan Vice President Delcy Rodriguez was quoted in August that “non-traditional mechanisms” within the exchange market would be implemented. Denoting in essence, that crypto will remain in usage and Tether is not going away from PDVSA´s radar. As done prior by Tether, the U.S. may strike at Venezuela economically by collaborating with Tether to freeze Maduro’s cryptofunds. In 2024, Tether Limited froze $5.2 million in USDT funds linked to the Maduro Regime. While this is only a small part of the $17.5 billion generated by PDVSA in that same year from oil revenues, it is a start. It showcases a willingness from Tether Limited to not allow the Regime to circumvent existing sanctions.
Moreover, further private-public partnerships with Tether Limited and relevant cryptocurrency companies are the best way to disrupt both PRC petrochemical interests and Venezuelan revenues. Working and regulating the flow of Tether into suspicious accounts through intermediary exchanges, such as OKX and Binance, can also provide a solution to cut PDVSA revenues. Overall, if the U.S. does explore opportunities to limit Maduro economically, it should consider the vital role of Venezuela’s cryptocurrency market as a chance for America to destabilize Chinese investments, further isolating Maduro from foreign aid. Ultimately, Venezuela’s pivot to cryptocurrency signals a profound shift in global energy politics, with digital assets becoming tools of statecraft, reshaping the balance of power between resource-rich nations and sanctioning states.
This article, written by Martin Brown, Open-Source Analyst at Florida International University’s Jack D. Gordon Institute and Carlos Ricaurte-Orozco, Graduate Researcher focusing on Latin American Political Economy and Development for Florida International University.