Venezuelan oil, masked as Malaysian, rushes into China before fuel tax

SINGAPORE/KUALA LUMPUR/MEXICO CITY (Reuters) – Traders are racing to deliver record volumes of Venezuelan crude oil masked as Malaysian bitumen blend to China, ahead of new fuel taxes that look set to upend the lucrative flow of sanctioned oil to the world’s top crude importer.

China has over the past 12 months bought an estimated $3.5 billion worth of Venezuelan oil relabelled as Malaysian fuel, according to cargo tracking and industry sources, throwing Caracas a vital lifeline while it grapples with a collapsing economy amid tough U.S. sanctions.

Much of it has come in as bitumen blend, a mix of tar-like heavy crudes and refinery residue fuels that doesn’t attract consumption tax like fuel oil and also isn’t subject to China’s quotas on oil imports.