China’s Teapot May Shift to Iranian Crude as Venezuelan Supplies Halt
WANA (Jan 07) – Traders and analysts say China’s independent refineries are expected to increase purchases of heavy crude from sources including Iran in the coming months, as Venezuelan oil shipments have halted following the removal of the country’s president by the United States.
On Tuesday, U.S. President Donald Trump announced that Washington and Caracas had agreed on exports of up to $2 billion worth of Venezuelan crude to the United States, following the detention of Venezuelan President Nicolás Maduro by U.S. forces.
Analysts say the deal is likely to curb Venezuelan oil flows to China, reducing a key source of discounted crude for China’s independent refineries, known as “teapots.” China, the world’s largest crude oil importer, is a major buyer of oil from Russia, Iran, and Venezuela.
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WANA (Jan 05) – What has unfolded in Venezuela in recent days may, at first glance, appear to be a local crisis or a political dispute confined to Latin America. For a significant part of the international community, however, these developments evoke a familiar pattern—one previously applied in the Middle East, particularly toward Iran, and […]
Market analysts note that while the loss of Venezuelan barrels would affect teapots most, supplies from Russia and Iran remain abundant, limiting the incentive for Chinese refiners to seek non-sanctioned crude, which is often less economical.
Shipping data shows that China imported about 389,000 barrels per day of Venezuelan oil last year, accounting for roughly 4 percent of its seaborne crude imports. However, vessel tracking indicates that loadings bound for Asia at Venezuela’s main ports have been halted since the start of January, despite dozens of sanctioned tankers leaving Venezuelan waters earlier with significant volumes of crude and fuel.
Traders said that as supplies tightened, Venezuelan Merey crude for prompt delivery was offered at discounts of around $10 per barrel to ICE Brent, compared with discounts of about $15 per barrel a month earlier, before trading activity stalled. Other offers were reported at discounts of roughly $11 per barrel.
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WANA (Dec 22) – Two of the world’s most influential oil market institutions—the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA)—have released differing estimates regarding Iran’s oil production in August 2024, highlighting ongoing uncertainties surrounding the country’s actual output levels. According to the IEA’s latest report, Iran produced an […]
According to analysts, Venezuelan crude currently stored on ships in Asia could cover around 75 days of China’s demand, reducing the need for immediate replacement. However, teapot refiners that rely on Venezuelan oil are expected to shift toward Russian and Iranian crude in March and April. China could also turn to non-sanctioned suppliers such as Canada, Brazil, Iraq, and Colombia.
Market sources say buyers have not yet actively sought alternatives, as Iranian heavy crude, priced at about $10 per barrel below Brent, remains the cheapest substitute. Traders added that teapots may also consider Middle Eastern grades, including Basra crude from Iraq.
Meanwhile, traders said discounts for Canadian crude delivered to China in April have widened this week to around $4–5 per barrel below Brent, reflecting expectations of weaker U.S. demand.
Iran’s oil export. Social media/ WANA News Agency
