Putin’s and Xi’s sunk costs

Why Trump’s Venezuela oil gambit could be bad news for Russia and China

After U.S. President Donald Trump’s operation to seize Venezuelan President Nicolás Maduro last Saturday, Washington quickly began demanding access to the country’s oil market for U.S. companies. Whether this pressure will deliver concrete results remains unclear. But one thing is certain: America’s new assertiveness has already reshaped expectations — and not in favor of Beijing or Moscow. Trump’s Venezuela gamble threatens to upend years of painstaking work by Russia and China in a country that holds the world’s largest proven oil reserves. Both powers have invested heavily in Venezuelan crude, infrastructure, and political ties, filling the vacuum left by Western companies under sanctions. A potential U.S. return would not only challenge these positions but could also weaken China’s access to discounted oil and undercut Russia’s influence in Latin America. Meduza explains how Beijing and Moscow have already been affected by Washington’s new campaign and what may come next.

The U.S. capture of Venezuelan President Nicolás Maduro and the subsequent statement from Secretary of State Marco Rubio laying claim to the entire Western Hemisphere have greatly increased the risks to Russia’s and China’s economic interests in the region.

Washington’s actions primarily affect its main rival for global influence: China. Today, Beijing is the largest buyer of Venezuelan oil. In 2025, crude from Venezuela accounted for roughly four percent of China’s total oil imports. Venezuelan oil has several key advantages: it’s cheap thanks to heavy sanctions-related discounts, and its properties make it especially valuable for construction and road-building. As energy expert Mikhail Meydan told Bloomberg, this crude is particularly prized by smaller, independent Chinese refineries, which purchase it even more actively than China’s state-owned oil giants.

You’re currently reading Meduza, the world’s largest independent Russian news outlet. Every day, we bring you essential coverage from Russia and beyond. Explore our reporting here and follow us wherever you get your news.

For now, the blow to Beijing is softened by large volumes of oil stranded on sanctioned tankers. According to estimates by the analytics firm Kpler, around 82 million barrels are currently idle off the coasts of China and Malaysia, more than a quarter of which originated in Venezuela. To acquire these supplies, Chinese firms must rely on sanctions-evasion schemes — inevitably complicating payments, insurance, and ownership rights.

China’s major oil companies are also deeply embedded in Venezuela’s upstream sector. Sinopec and China National Petroleum Corporation hold development rights to oil fields with reserves of 2.8 billion and 1.6 billion barrels respectively, according to a Morgan Stanley article citing Wood Mackenzie.

Russia, too, has a significant foothold in Venezuela through the state-owned Roszarubezhneft, created in 2020 to take over Rosneft’s assets. Analysts estimate that the company controls development rights to fields holding around 2.3 billion barrels of oil. “The crucial question is what will happen with Venezuela’s production from here,” Morgan Stanley analysts write. “Over the medium term, however, risks to production are clearly to the upside, at least from a resource and technical perspective.”

For Russia, however, the greatest risk posed by a U.S. return to Venezuela isn’t necessarily the loss of specific assets. Instead, it may be the broader prospect of downward pressure on global oil prices. Any sustained increase in Venezuelan output would further strain Russia’s federal budget, already destabilized by massive military spending.

That said, a true renaissance of Venezuela’s oil industry would be a slow, uncertain process requiring years of investment and favorable global market conditions, which may not materialize until well into the next decade. For now, investors have responded calmly to events in Caracas and to the rhetoric coming out of Washington. Despite the rhetoric, there has been no oil price crash.