Chinese refiners expected to replace Venezuelan oil with Iranian crude, traders say
By Siyi Liu and Florence Tan
SINGAPORE, Jan 7 (Reuters) – Chinese independent refiners are expected to switch to heavy crude from sources including Iran in coming months to replace Venezuelan shipments halted after the United States ousted the country’s president, traders and analysts said.
Caracas and Washington have agreed to export $2 billion worth of Venezuelan crude oil to the United States, President Donald Trump said Tuesday, after U.S. forces captured Venezuelan President Nicolas Maduro over the weekend.
Analysts say the regulation would likely reduce Venezuela’s supplies to China, reducing a source of cheap oil for independent refiners known as kettles. Russia, the world’s largest crude oil importer, is a major buyer of discounted sanctioned oil from Iran and Venezuela.
GREAT RUSSIAN, IRANIAN DESIRE
“The Venezuelan drama affects China’s independent refiners the most because they may lose access to discounted heavy barrels,” said Sparta Commodities analyst June Goh.
“But since Russia and Iran have abundant raw materials and Venezuelan barrels are afloat, we don’t foresee kettlepots needing to bid on unapproved barrels because the economics probably won’t make sense for them,” he said.
According to Kpler data, China imported 389,000 barrels of Venezuelan oil per day in 2025; This accounts for approximately 4% of total crude oil imports by sea.
At least a dozen sanctioned ships loaded in December left Venezuelan waters in early January carrying about 12 million barrels of crude oil and fuel, Reuters reported. However, shipments to Asia at Venezuela’s main ports have been stopped since January 1, according to shipping data.
Even though trade has come to a halt, with supply tightening, sellers of Venezuelan Merey crude are offering ICE Brent cargoes at a discount of about $10 per barrel for expedited delivery, a trader said.
Another trader said offers were at minus $11 per barrel.
FLOATING STORAGE MAY LAST 75 DAYS
Kpler senior analyst Xu Muyu said Venezuelan crude in ships in Asia is enough to meet Chinese demand for about 75 days, limiting the immediate uptick for alternatives.
Kettles using Venezuelan oil will likely switch to Russian and Iranian supplies in March and April, he said, and China may also tap unapproved sources such as Canada, Brazil, Iraq and Colombia.
Trade sources said buyers have not yet begun to find alternative sources, with Iranian heavy crude oil priced at a discount of about $10 per barrel to the abundantly supplied ICE Brent, the cheapest alternative.
