Trump’s hammer falls on China!
The South American country Venezuela, which is sitting on the world’s largest oil reserves, has become a geopolitical playground these days. You can understand it like the well belonged to Venezuela, but China’s thirst was being quenched. Venezuela has about 303 billion barrels of crude oil, whose estimated value is estimated at $ 15 trillion. Despite having such huge wealth, this country was burdened with huge debt to China. But now a big twist has come in the story. America has taken command of Venezuela’s oil exports, due to which China’s well-planned game has been spoiled. The oil which was earlier going to China to repay the loan, has now changed its path.
15 trillion dollar treasure
This is not just a matter of oil, but also of the web of diplomacy and debt which China had cleverly woven. Relations between China and Venezuela started strengthening since the late 1990s. The circumstances were such that in 2023 these relationships were named ‘All Weather Strategic Partnership’. In the name of energy, finance and military cooperation, China brought Venezuela closer to itself. The report of the US-China Economic and Security Review Commission shows that despite US sanctions, the friendship between the two countries was deep. In fact, China gave huge loans to Venezuela and in return strengthened its hold on the oil resources there. It was a kind of deal, take money and give oil.
After all, how much money is stuck?
According to a Reuters report, China had severely strangled Venezuela. According to ‘AidData’, a research lab at William & Mary University of America, between 2000 and 2018, Chinese state banks had given loans of about $ 106 billion to Venezuela. By 2017, Venezuela owed $44 billion.
However, since Venezuela defaulted (unable to repay its debt) in 2017, accurate figures have become difficult to obtain. JP Morgan estimates that $13 to $15 billion still remains to be accounted for, while some institutions believe it to be $10 billion. The catch is that Venezuela has stopped releasing its economic data since 2019.
Dragon’s game spoiled due to America’s entry
This game of ‘loan against oil’ was going on in a very vicious manner between China and Venezuela. Insiders of PDVSA (Venezuela’s state oil company) say that in 2019, China had given some relaxation in the repayment of the principal amount of the loan. In return, about 6 lakh 42 thousand barrels of crude oil and fuel were being sent to China every day from Venezuela.
Interestingly, the money received from the sale of this oil did not directly go into the hands of Venezuela. This money went to a special account whose remote control was with Beijing. That means China was recovering its debts itself. But now due to America’s control on oil exports, this supply chain is breaking. This is a big blow for China, because the oil which it was using as its property, is now being sent to other markets. Trump’s policies and American intervention have acted like snatching a morsel from the dragon’s mouth.