Venezuela is emerging as a key testing ground for President Donald Trump’s ambitions in the Western Hemisphere and a potential source of competition with China, as the United States plans to take control of Venezuela’s crude oil reserves and restructure the country’s debt, including billions of dollars owed to China.
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The Trump administration has announced plans to take control of more than 65 billion barrels of Venezuela’s crude oil reserves, a move that could directly affect billions of dollars in debt owed to Chinese banks and tied to oil barrels that have yet to be delivered.
China’s response to the U.S. moves has been relatively restrained. A Chinese Foreign Ministry spokesperson said that China’s “legitimate rights and interests” in Venezuela “must be protected.”
Caracas stopped publishing detailed information on its obligations after defaulting on its sovereign debt in 2017. However, Venezuela’s total debt to China is believed to have reached at least $10 billion by 2025.
In a development that could further pressure China’s ability to recover its loans, U.S. Energy Secretary Chris Wright said Wednesday that Beijing would have no claims on revenue from new Venezuelan oil production, potentially cutting off one channel for repaying China’s debt.
