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

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Published08 JAN 26 - 16:24 Reading time  minutes

“The Venezuela drama hits China’s independent refineries the hardest, as they may lose access to the discounted heavy barrels,” said Sparta Commodities analyst June Goh.

“However as there are ample Russian and Iranian feedstocks available and Venezuelan barrels on water, we do not foresee the teapots needing to bid up for unsanctioned barrels as the economics would likely not make sense for them,” she said.

Reuters, Jan 8, 2026 – Chinese independent refiners are expected to replace Venezuelan heavy crude with Iranian and Russian barrels after Venezuelan shipments to China were curtailed following a new deal redirecting Venezuelan oil to the US. While Venezuelan supply tightness has narrowed discounts for Merey crude, China still has around 75 days of floating Venezuelan supply, limiting any immediate price impact. With ample discounted Iranian Heavy and Russian grades available, traders do not expect teapots to bid up unsanctioned crude, keeping the shift more about flow redirection than outright demand strength.

Author

June Goh

Senior Oil Market Analyst

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