From the Caribbean to the Amazon: China's crude-centered pivot away from Venezuelan to Brazilian Oil
- Carlos Ricaurte-Orozco
- Jan 4
- 6 min read
In early January, the Venezuelan President Nicolas Maduro was captured in a special military operation in Caracas, and is expected to be tried for drug trafficking in New York. This represents the natural conclusion to a doctrine of maximum pressure against the Venezuelan Regime, which has been formally accused of fomenting drug trafficking operations across the Americas. The Maduro Regime has also been deemed as illegitimate by multiple sectors of the international community, instead recognizing the opposing candidate Edmundo Gonzalez as the rightful “President-Elect” of the 2024 Venezuelan Election. These events among many other irregularities from the Regime serve as the justification for the sanctioning of crude coming from Venezuela.
A part of this pressure including the stopping of the illicit oil trade, with the oil Tanker Bella 1 refusing to be boarded by the United States Coast Guard, representing the third boat in a streak of oil tanker vessels denominated as “very large crude carriers” (VLCCs) transporting sanctioned and/or illicit Venezuelan Crude. This trend follows the “oil quarantine” doctrine enacted by the Trump Administration, targeting major black market petroleum shipments leaving Venezuela. Under this doctrine, US Military personnel fielded in the Caribbean have been ordered the boarding of these tankers as part of Operation Southern Spear, seeking to curb drug trafficking operations in the Western Hemisphere.
The two other previously-sanctioned VLCCs, the Centuries and the Skipper, were boarded by US personnel while carrying millions of barrels of oil to their respective destinations, with the former being headed to the People's Republic of China (PRC). This prompted a specific denunciation by the Chinese Foreign Ministry, which catalogued the seizure of the Centuries´ 1.8 million barrels of sanctioned oil heading to China as a “serious violation of international law”. These statements alongside the over 465,000 barrels per day (bpd) that China imports from Venezuela, denote that a traditional source of Latin American crude imports for the PRC is now under threat of being cut off, prompting China to diversify its investments, or to rely on old suppliers of oil.
It is here when Brazil, the largest oil exporter in Latin America, gains a new sense of strategic importance. Sino-Brazilian Relations can be traced back to the 1970s, with official diplomatic relations being largely based around investment and trade. From the beginning of their bilateral commerce to the present day, Brazilian crude oil has been critically important to the PRC, with Boston University´s 2024 Economic Bulletin pointing out that over 81% of China's imported Latin American oil comes from Brazil.
This comes at a time in which experts denote a long period of Brazilian “re-primarization” of its imports, as in continued reliance on natural resource exports. The reliance can largely be traced to the need to attract Chinese foreign direct investment, of which Brazil is the recipient of up to 35.1% of the entire region's Chinese FDI. These investments are focused around main infrastructure projects and extractive industries, with the oil sector taking special precedence by Chinese State-owned Enterprises (SOEs).
Key current investments by the PRC into Brazilian Oil vary greatly, and go from offshore crude bids to major oil-based infrastructure deals. In 2023, the Brazilian SOE Petrobras signed four Memorandums of Understanding (MoUs) with the China National Offshore Oil Corporation (CNOOC), the China Petrochemical Corporation (SINOPEC), China Energy and Citic Construction. These four SOE firms are among the PRC's petrol and energy giants, which now have a considerable presence in exploration, extraction and refining of oil across Brazil.
The following year, CNOOC and another SOE, Petrochina, won bids of over 12 and 11 million barrels of oil respectively from the Búzios Offshore Field, near Rio de Janeiro. Earlier this year, the PRC conglomerate China Merchants Port Holdings (CM Ports) announced a major purchase in the Oil Terminal of the Port of Açu, now being 70% owned by CM Ports as of 2025. Up to 25% of Brazil's total oil exports go through Açu. This further demonstrates China´s deep presence in the Brazilian petrochemical sector, which stands as its safest bet in ensuring crude availability amidst the crackdown on Venezuelan sanctioned oil.
This particularly stands out amidst the opening of a new door for mass oil extraction; the Brazilian Amazon. The floodgates were officially opened when Brazilian President Lula da Silva and Petrobras announced that offshore oil drilling would begin in the Amapá Oil Block, a mere 500 km away from the mouth of the Amazon River. This is far from the first major oil investments being done in the Amazon Region, with the first ones being traced back to the 1980´s with the Urucú Oil Province, connected to the oil-rich Solimoes Basin. Urucú is directly administered by Petrobras, and serves as a key onshore oil producer standing at around 98,000 boe/d (Barrels of Oil equivalent per day).
Nonetheless, newfound attention and the focus of foreign investment has been the Foz do Amazonas, the offshore oil basin where both Amapá is located and where Petrobras aims to begin mass crude extraction within the next seven years. In June of this year, The Chinese National Petroleum Corporation (CNPC) was awarded nine oil exploration areas through an international consortium on the Foz do Amazonas, near the Amazon River.
The decision to open the Amazon to further mass oil extraction has been met with strong resistance from civil society inside and outside Brazil, mostly citing legal and environmental concerns. Pertaining specifically to the exploration areas within the Foz do Amazonas, the Observatório do Clima, (Climate Observatory) an organization covering over 130 environmentalist NGOs called this decision “disastrous”, saying there was a lack of due legal processes by the Brazilian Government in granting the needed licenses for offshore exploration.
International organizations such as Greenpeace warned of the pending fear of oil spills in such an ecologically sensitive area, calling this action a “Green Facade” by the Government. Such fears aren't baseless, upon understanding the histories of the PRC firms currently involved in Brazil. The CNPC, for instance, was involved in a 2010 oil spill in Dalian, China, with over 1500 tonnes of crude spilling into the Yellow Sea. Another case involved a CNPC subsidiary, having to pay over $400 million for environmental damages to the Government of Chad in 2014. These among other incidents add a concerning mantle of reality to the fears expressed towards the biosphere within the Foz do Amazonas.
Despite these environmental concerns, the PRC´s need for crude and the ability to obtain it consistently through Brazil is not expected to stop. If anything, they're expected to increase with the current situation in Venezuela. The potential downfall of the Maduro Regime has led to a climate of uncertainty, especially on the oil trade for the PRC. The historical trend of investment is most likely to be strengthened. The year 2024 counted with $4.14 billion worth of Chinese investments into Brazil, with the oil sector alone accounting for 25% of that capital (without counting infrastructure to transport that oil). Annual forecasts for 2025 pointed to China importing up to 550 Million Metric Tonnes (MMt) of oil, ensuring that hunger for crude will remain a driving force of Beijing´s international approach to Latin America.
However, with Venezuelan sanctioned oil becoming increasingly harder to come by, there is likely to be a further deepening of PRC activity within the Brazilian Petrochemical Sector, and by extension, the Amazon. At their May 2025 meeting, Presidents Xi and Lula reaffirmed the “strategic partnership” in terms of energy the two countries share, with the United States military buildup in the Caribbean against drug trade from Venezuela beginning in August 2025, reaching its climax with Maduro´s capture. The existing bilateral relations, new investment and offshore opportunities in the Amazon and the ever-tightening noose on Venezuela´s sanctioned oil means that China´s Crude Hunger in the region will not end, but will merely rely ever-more on Brasilia. Meaning that, for better or for worse, Brazil will take a newfound critical role in the Great Power competition currently shaking Latin America and the world.
This article written by Carlos Ricaurte-Orozco, a Graduate Researcher focusing on Latin American Political Economy and Development for Florida International University. He has previously focused on the role of patterns of trade and foreign investment in the region.
Interesting read.