U.S. blockade shuts off China, Cuba from Venezuelan oil

On New Year’s Day, an oil tanker partially filled with sanctioned crude slipped out of Venezuela’s main export terminal and sailed toward Iran.

- Collin Eaton & Paul Vieira

The next day, another tanker escaped with Venezuelan oil, scrambling its signals to hide its course. Satellite imagery later confirmed it was headed to China.

The two cargoes appear to be the last illicit oil to leave Venezuela, according to a report from shipping intelligence firm Kpler.

On Jan. 3, U.S. forces captured and ousted Venezuelan President Nicolas Maduro. Since then oil exports have dropped 75% from what the country was moving out every month last year, cutting off a vital supply of money to the Venezuelan regime.

What little oil left ports over THE WALL STREET JOURNAL. the next 10 days was all bound for the U.S. or earmarked to be used in Venezuela's refineries to create fuel for people and industries there.

Kpler data show cargoes en route to places like Pascagoula, Miss., where Chevron owns a large refinery, and oil-processing hubs in Corpus Christi, Texas, and St. Charles Parish in Louisiana.

Ultimately, the slowdown in Venezuelan oil flows threatens China’s status as the world’s most prolific oil buyer. The country has shopped for heavily discounted crude from places like Russia, Iran and Venezuela, but as its options become more limited, it risks slowing down its buying as the global oil market anticipates a supply glut.

“Instead of buying hand over fist, China may cool down a little bit,” said Denton Cinquegrana, chief oil analyst at OPIS, which, like The Wall Street Journal, is owned by Dow Jones. “That adds more to the global supply. They were absorbing some of that oversupply.”