How have sanctions and rerouting since 2024 changed the buyers and shipping routes for Venezuelan oil?
Executive summary
Since 2024 a renewed and increasingly aggressive U.S. sanctions and enforcement campaign has reshaped both who buys Venezuelan crude and how it moves: formal buyers have become fewer and more regional, shadow buyers and intermediaries—often in Asia and the Caribbean—have taken a larger role, and shipping has shifted toward a "dark" or shadow fleet using obfuscated flags, ship identities and transshipment hubs to evade detection [1] [2] [3]. Heightened enforcement — including sanctions on tankers, asset-blocking designations and at least one U.S. seizure — has forced rerouting, delayed loadings and pushed Venezuelan barrels into steeper discounts, while also creating winners (certain U.S. refiners and sanctioned-compliant buyers) and losers (independent Chinese refiners and parts of PDVSA’s export chain) [4] [5] [6].
1. Who is still buying Venezuelan oil — a narrower, more regional market
Before the 2019/2020 sanctions era the U.S. was the main market for Venezuelan crude, but sanctions and then selective licenses shifted buyers to China and regional refiners; by 2024 China, Malaysia and other Asian destinations dominated parts of the trade, while European buying surged briefly under waivers (Spain's imports tripled in early 2024) when waivers were granted [7] [8] [9]. After waivers were reimposed and then rescinded at various points in 2024, buyers fragmented: legacy, sanctioned-tolerant customers (notably parts of China’s "teapot" independent refineries) continued to take discounted barrels through intermediaries, while formal, sanctioned-compliant western companies operated under OFAC licenses or wound down activities [9] [6].
2. Shipping routes: from open lanes to a shadow fleet and obfuscated transits
As sanctions tightened in 2024–25, an organized "dark fleet" of tankers emerged as the primary conduit for sanctioned Venezuelan barrels, employing flags of convenience, ship-to-ship transfers and transshipment through third-country ports to mask origin and destination; U.S. sanctions targeted specific vessels (Nord Star, Lunar Tide, Della and others) and companies identified as facilitating those routes [4] [1] [2]. Tracking firms and PDVSA documents show tankers waiting at anchor, turning away or rerouting — flows that moved from straight exports to Asia toward more complex chains via Caribbean, Malaysian and other hubs, sometimes increasing transit times and lifting costs [1] [10] [7].
3. Enforcement tools changed the calculus: seizures, sanctions on shadow vessels, and legal risk
U.S. authorities broadened enforcement beyond financial blacklisting to include designation of vessels as blocked property and even physical seizures — exemplified by the December seizure of the tanker Skipper — signaling that buyers and ship operators must now weigh confiscation risk in addition to penalties and loss of U.S. dollar access [5] [4]. Treasury and OFAC actions in late 2024–2025 explicitly targeted shadow-fleet actors and authorized blocking of tankers, which analysts say has removed many willing carriers from the market and reduced Venezuela’s effective export capacity [4] [3] [10].
4. Market consequences: discounts, winners and losers
The combined effect of sanctions and rerouting has been lower observable exports, steeper discounts on Venezuelan crude sold through clandestine channels, and redistribution of economic gains: sanctioned-compliant U.S. refiners stand to gain if flows normalize under new licensing or regime change scenarios, while sanctioned-tolerant buyers — especially Chinese teapots and other independent refiners — either pay steep discounts or face disruption if seizures continue [6] [11]. S&P, Reuters and analyst reports document sharp monthly swings in flows — China’s receipts fell sharply in some months while Malaysia and other intermediary destinations rose — reflecting that barrels are still moving but through costlier and riskier channels [10] [1].
5. Political signaling, implicit agendas and open questions
Sanctions enforcement since 2024 has been as much about pressuring Nicolás Maduro as about market mechanics; U.S. seizures and blockades serve dual aims: choking regime revenue and deterring third-party actors from transacting, but they also carry domestic political optics and risks of disrupting global fuel supply for products that need heavy sour crude (diesel, asphalt) [5] [11]. Reporting confirms exports have fallen and vessels are waiting for instructions, yet major uncertainties remain about the durability of shadow networks, the willingness of buyers to accept seizure risk over time, and the pace at which any political transition would re-route barrels back to traditional markets — claims about large-scale permanent rerouting are plausible but not fully verifiable in publicly available shipping data [7] [3] [12].