Chinese refiners expected to replace Venezuelan oil with Iranian crude, traders say

By Siyi Liu and Florence Tan

SINGAPORE, Jan 7 (Reuters) - Chinese autarkic refiners are expected to power to dense crude from sources including Iran successful coming months to regenerate Venezuelan shipments halted since the ​U.S. removed the country's president, traders and analysts said.

Caracas and Washington agreed to export up to $2 ‌billion worthy of Venezuelan crude to the United States, President Donald Trump said connected Tuesday, aft U.S. forces captured Venezuelan President Nicolas Maduro implicit ‌the weekend.

That statement is apt to curtail Venezuelan proviso to China, analysts say, reducing a root of inexpensive lipid for autarkic refiners known arsenic teapots. The world's biggest crude importer is simply a large purchaser of discounted sanctioned lipid from Russia, Iran and Venezuela.

AMPLE RUSSIAN, IRANIAN SUPPLY

"The Venezuela play hits China's autarkic refineries the hardest, arsenic they whitethorn suffer entree to the ⁠discounted dense barrels," said Sparta Commodities expert ‌June Goh.

"However arsenic determination are ample Russian and Iranian feedstocks disposable and Venezuelan barrels connected water, we bash not foresee the teapots needing to bid up for unsanctioned barrels arsenic ‍the economics would apt not marque consciousness for them," she said.

China imported 389,000 barrels per time of Venezuelan lipid successful 2025, astir 4% of its full seaborne crude imports, Kpler information showed.

At slightest a twelve sanctioned vessels that loaded successful December departed Venezuelan ​waters successful aboriginal January carrying immoderate 12 cardinal barrels of crude and fuel, Reuters has reported. However, loadings ‌for Asia astatine Venezuela's main ports person stopped since January 1, shipping information showed.

With proviso tightening, sellers of Venezuelan Merey crude for punctual transportation offered cargoes astatine discounts of astir $10 per tube to ICE Brent versus $15 past month, said 1 trader, though commercialized has travel to a standstill.

Another trader said offers were astatine minus $11 per barrel.

FLOATING STORAGE CAN LAST 75 DAYS

Venezuelan crude aboard ships successful Asia remains capable to screen astir 75 days of Chinese demand, limiting immoderate ⁠immediate upside for alternatives, said Kpler elder expert Xu Muyu.

Teapots utilizing ​Venezuelan lipid are apt to power to Russian and Iranian proviso ​in March and April, and China tin besides pat non-sanctioned sources specified arsenic Canada, Brazil, Iraq, and Colombia, she said.

Buyers person yet to commencement sourcing alternatives, commercialized sources said, with Iranian Heavy ‍crude priced astatine a discount ⁠of astir $10 per tube to ICE Brent successful ample supply, the cheapest alternative.