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11 years ago

Chinese Regime Profits by Re-selling Cheap Venezuelan Oil

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Leaked diplomatic cables from February this year suggest Venezuelan officials are angry at Chinese companies. They said the companies bought their oil for cheap and made big profits by selling it to other countries.

The two countries began trading oil with much fanfare last year. Venezuelan President Hugo Chavez proclaimed he wanted to triple his country's oil exports to China to one million tons in five years. The two countries invested billions in joint development projects.

But in a U.S. diplomatic cable released by WikiLeaks, an unnamed official from Venezuelan state-owned oil producer Petroleos de Venezuela SA, told U.S. officials that Chinese companies had paid as little as $5 a barrel for crude oil. This was way below the open market price of around $78 at the time.

According to the cable, Venezuela was "extremely upset" with Chinese companies because Chinese petroleum import statistics suggested those companies were diverting the oil to third countries and selling it on the open market for a large profit.The official said tankers had been diverted to the United States, Africa and Asia.

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