By Siyi Liu and Florence Tan
SINGAPORE, Jan 7 (Reuters) – Independent Chinese refiners are expected to switch to heavy crude oil from sources including Iran in the coming months to replace Venezuelan shipments that have been halted since the United States ousted the country’s president, traders and analysts said.
Caracas and Washington have agreed to export up to $2 billion worth of Venezuelan crude to the United States, President Donald Trump said on Tuesday, after US forces captured Venezuelan President Nicolas Maduro over the weekend.
That arrangement would likely reduce Venezuela’s supply to China, analysts say, and reduce a source of cheap oil for independent refiners known as teapots. The world’s largest crude importer is a major buyer of discounted sanctioned oil from Russia, Iran and Venezuela.
RUSSIAN ENVIRONMENTAL SUPPLY, IRAN
“The Venezuela drama hits China’s independent refiners the most, as they could lose access to discounted heavy barrels,” Sparta Commodities analyst June Goh said.
“However as there is enough Russian and Iranian raw material available and Venezuelan barrels on the water, we do not foresee the teapots needing to bid for non-sanctioned barrels as the economics probably don’t make sense for them,” she said.
China imported 389,000 barrels per day of Venezuelan oil in 2025, about 4% of total seaborne crude imports, Kpler data showed.
At least a dozen sanctioned vessels that were loaded in December left Venezuelan waters in early January with some 12 million barrels of crude oil and fuel, Reuters reported. However, shipments to Asia at Venezuela’s main ports have stopped since January 1, shipping data showed.
With supply tightening, sellers of Venezuelan crude for prompt delivery have offered cargo at discounts of about $10 a barrel to ICE Brent against $15 last month, one trader said, although trading has stalled.
Another trader said bids were $11 short a barrel.
CASH STORE MAY LAST 75 DAYS
Venezuelan crude oil aboard ships in Asia remains enough to cover about 75 days of Chinese demand, limiting any immediate upside for alternatives, Kpler senior analyst Xu Muyu said.
Teapots using Venezuelan oil are likely to switch to Russian and Iranian supply in March and April, and China may also tap unsanctioned sources such as Canada, Brazil, Iraq and Colombia, she said.
Buyers have yet to start sourcing alternatives, trade sources said, with Iranian Heavy crude priced at a discount of about $10 a barrel to abundantly supplied ICE Brent, the cheapest alternative.