China moves to secure Latin American oil reserves

Mar 01, 2011 12:00 AM

America is walking blindly into a situation where 10 % of its oil imports could be redirected to Asia.
China is positioning itself to supply its ever growing oil thirst with Latin American oil -- at the expense of the United States. Already this year, the Chinese have secured an oil supply of nearly 600,000 bpd from Latin America and they are set to purchase far more in the near future. The Chinese secured deals throughout Latin America in 2010 worth at least $ 65 bn in stakes of projects that could eventually produce over 1.3 mm barrels of crude oil a day.

Most of China’s Latin American oil investments have been with Venezuela -- a country that currently supplies the US with 10 % of its oil imports.
“All the oil that China needs for the rest of this century is underneath Venezuelan soil,” stated Venezuelan President Hugo Chávez last December. This statement is definitely an exaggeration, as China will require much more oil than Venezuela alone can produce. This, however, is all the more reason for US citizens to be concerned. The anti-American Chávez has never been happy at the fact that he has to sell his oil to the US in order to keep Venezuela’s economy afloat. He would be more than happy to redirect oil exports away from the US and toward China if an opportunity presented itself.

The Chinese are currently planning a Venezuelan oil refinery with a 200,000-bpd capacity and have already rented a 5 mm-barrel storage facility in the Caribbean. All that is left to do is for China to secure a way to economically ship Venezuelan oil across the Pacific to its own shores.
Venezuela has no coastline on the Pacific Ocean and a trans-oceanic oil barge is too large to fit through the Panama Canal. These two facts make it hard to economically ship Venezuelan crude to China.

The president of Colombia, however, announced in early February that the Chinese plan on building a 138-mile-long railway across his country -- from the Gulf of Uraba on the Atlantic coast to the port of Cupica on the Pacific coast. This new energy transportation thoroughfare will allow China to ship oil and coal from eastern Colombia -- and Venezuela -- to Pacific ports, where it can then be shipped across the ocean.
The completion of this railroad -- already being hailed as a land-based Panama Canal -- could transform the oil politics of Latin America overnight, making China a prime recipient of this oil.

Consider what Herbert W. Armstrong wrote in his book The United States and Britain in Prophecy:
Although all wealth comes from the ground, prosperity and affluence on a national scale always have come by industry and commerce. And commerce between nations has been transacted almost altogether by the sea-lanes of the world -- by ships, and, within a continent, by railroads.

America is walking blindly into a situation where 10 % of its oil imports could be redirected to Asia due to a lack of influence over the Panama Canal and Colombia’s railways.

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