Venezuela Remains A Problem That China Won’t Solve

Since the U.S.-Venezuelan tensions culminated in an American raid that captured Venezuelan President Nicolás Maduro, Washington has, unsurprisingly, drawn the condemnation of Beijing. Multiple Chinese media outlets have expressed shock and distaste at what they frame as American dismissal of international norms and fundamental principles of sovereignty.

Amid these renewed headlines, some observers have speculated that Beijing could step in to stabilize Caracas and reshape the global oil markets. The fear of Chinese influence in the Western hemisphere has certainly motivated the Trump administration. However, the reality will be far less dramatic, and we should not hold our breath waiting for Chinese vocal condemnation to transition into more concrete support.

Venezuelan Oil: Too Heavy, Too Niche

While Venezuela sits atop the world’s largest proven oil reserves (a staggering 300+ billion barrels or roughly 17% of the global total), only a fraction can be readily used. Most of the country’s supply is extra-heavy and sour, requiring specialized diluents and refinery configurations, the bulk of which are in the United States. described as “dilapidated” and “antiquated” by IEA’s Chief Energy Economist Tim Gould, Venezuela’s oil infrastructure severely limits the country’s present ability to bring its oil to market and would likely need a large volume of investment before it can bring any meaningful impact to the energy market.

Venezuela’s faltering production is another limiting factor. Since 2013, Venezuela’s oil production has fallen from 2.5 billion barrels per day (bpd) to under one million bpd by 2025. Chronic mismanagement, corruption, and U.S. sanctions have left infrastructure in decay and skilled labor scarce. What Caracas’s wells need is not simple reactivation but full re drilling, and Venezuela’s lack of operational elasticity leaves it incapable of influencing global markets on short notice.

China’s Patience is Limited

China’s ties to Caracas have increasingly been shaped by caution and risk management rather than deep strategic commitment. Venezuela has continued to struggle economically and politically, making it an unreliable partner.

China remains Venezuela’s largest oil customer, importing approximately 90% of Venezuela’s oil. While these numbers appear impressive on paper, Venezuelan crude accounts for only a small fraction of Chinese imports, less than 5% according to oil analytics firm Vortex, and decades of mismanagement on Caracas’s side have eroded Beijing’s confidence. Even before the latest geopolitical shocks, China has pulled back from its South American partner. Beijing’s massive “loans-for-oil” arrangements, once the centerpiece of its engagement, slowed sharply after the mid-2010s, effectively ending in 2016, as falling oil prices, U.S. sanctions, and Venezuela’s cratering production made debt repayment increasingly tenuous. Chinese lenders and state oil firms grew wary of expanding further exposure to a partner that struggled even to meet existing obligations. Indeed, the squandering of approximately $65 billion in loans and an uneasy relationship with the corrupt Chavismo governing project sustained under Nicolás Maduro has left a bad taste.

China’s top financial regulator requested its policy banks and other major lenders to report their lending exposure to Venezuela shortly after the January 3rd strikes, reflecting Beijing’s concerns about financial risk rather than confidence in Caracas’s economic or political stability. This faltering trust is also reflected in declining military trade. According to SIPRI, China has not shipped new military equipment to Venezuela in over three years—a tangible indicator that its strategic commitment is waning. Formal arms transfers have largely dried up, and beyond arms sales, the inefficacy of Chinese radar systems during the January 3rd strikes further undercuts Beijing’s incentive to expand military ties.

Hot Air, Not Market Shock

Even as recent statements from Caracas and Beijing have generated headlines suggesting that the former could reshape energy markets, structural realities tell a different story: low-quality oil, decaying infrastructure, and entrenched political dysfunction mean that the global supply remains largely unaffected. China’s rhetoric is largely symbolic at this point, designed to project influence without committing capital or risk.

While Beijing has continued to spew hot air, its eroding trust in Venezuela, coupled with the latter’s lack of operational elasticity, indicates that any actual movement from Beijing’s end remains highly unlikely.