Since becoming a net oil importer in 1993, China has rapidly overtaken everyone but the US in its thirst for the world's crude. If one could quantify a country's eagerness to control this vital resource though, China would surely be number one. Aggressive investments in Africa's resource sector have led some to dub its policies there the “Great Chinese Takeout”. Its latest move, a $20bn loans-for-oil deal with Venezuela, coming on top of an existing $8bn commitment, is its largest. This follows last year's $25bn loans-for-oil deal with Russia and separate agreements for $10bn each with Brazil and Kazakhstan.

On face value, China's energy grab appears naive. Extending below market rate loans and investing in areas like Venezuela's Orinoco Belt, recently eschewed by many multinationals, mean that it may earn a low risk-weighted return. Even if these projects are ultimately successful, procuring actual barrels halfway around the globe is inefficient and unnecessary. Oil is a fungible commodity so buying a distant barrel simply frees up a nearer one for someone else. Financially speaking, China is in effect entering massive, long-dated commodities futures contracts.

But perhaps the Chinese are being rational, whatever the direction of prices. The perils of dealing with shaky regimes cut both ways. For example, China signed a big oil deal with Iraq in 1997, then under sanctions, but dragged its feet at little expense. Chinese firms then re-entered the country in 2008. Similarly, current deals with pariahs Sudan and Iran represent a sort of diplomatic arbitrage. And, as a massive dollar creditor, making large loan commitments better matches assets and liabilities. If an overstretched US one day devalues those greenbacks then it can count on the same number of barrels at a lower real cost.