GreenergyDaily

Mar. 25, 2025

1. US President Donald Trump appeared to invent a new weapon of economic statecraft on Monday by threatening what he dubbed “secondary tariffs” on countries that buy oil from Venezuela to choke off its oil trade with other nations.

2. The threat said countries could face 25% tariffs on trade with the US if they purchase oil and gas from Venezuela. The move aims to cut a major source of revenue for the regime of Nicolás Maduro in Caracas while also putting further pressure on China.

3. China’s private refiners, long plagued by excess capacity and paper-thin margins, are facing yet another setback as the Trump administration imposes a 25% tariff on any buyer of Venezuelan oil and gas, Bloomberg reported today.

4. Most Venezuelan oil cargoes go to China’s independent processors, a vast constellation of companies clustered in the eastern province of Shandong, which turn the dense Merey crude into fuel and bitumen to pave roads and for use in the construction sector. The imports can make up as much as a fifth of feedstock at some operations, according to estimates from Chinese analysts.

5. The latest measures will not be crippling to China’s oil industry — enforcement is difficult, circumventing maneuvers are common and priced-out buyers can turn elsewhere. But they will add cost and curb supply for smaller refiners suffering from weaker domestic demand, a structural shift away from oil for transportation, and US efforts to stem the flow of cheap sanctioned crude from Iran.

6. “This is a new concept in economic warfare,” said Francisco Monaldi, director of the Latin American energy policy at Rice University’s Baker Institute for Public Policy in Houston. “How is it enforceable? It’s unclear of course.”