In a significant development for global energy markets, commodity trading giants Vitol Group and Trafigura Group have initiated discussions with major refiners in India and China regarding the sale of Venezuelan crude oil.
This move comes after the U.S. government provided preliminary approval for marketing the oil, signaling a potential shift in supply chains for Asia’s largest oil importers. The talks, which began over the weekend, are still in early stages, with no formal offers yet made. However, sources indicate that Vitol has approached Indian state refiners, offering cargoes at discounts of $8 to $8.50 per barrel against ICE Brent for March deliveries.
This initiative could inject up to 30-50 million barrels of Venezuelan oil into the market, much of which was originally destined for Chinese refiners under previous arrangements. The deal, valued at approximately $2 billion, represents a beat by trading houses over U.S. majors in securing first-mover advantage in post-sanction Venezuelan oil flows. As the U.S. ramps up pressure on Venezuelan leadership—following recent political shifts, including claims of ousting Maduro—these sales could reshape Asia’s access to heavy crude grades suited for complex refineries.
Indian and Chinese Refineries: Key Players in Venezuelan Oil
India and China, the world’s second and first-largest crude oil importers respectively, have historically relied on a mix of suppliers, including sanctioned sources like Venezuela, to meet their refining needs. China’s total crude imports averaged around 11.1 million barrels per day (mb/d) in 2024, while India’s hovered at 4.8 mb/d. Both countries have turned to discounted oil from Venezuela, Iraq, Iran, and Russia to optimize costs, especially amid geopolitical tensions.
Venezuelan crude, known for its heavy, sour characteristics, is particularly attractive to Asian refiners equipped to process it into fuels like diesel and jet fuel. However, U.S. sanctions have limited direct flows, forcing buyers to use intermediaries or rebrand cargoes—often via Malaysia for Iranian and Venezuelan oil. In 2025, China’s Venezuelan imports averaged about 0.47 mb/d, while India’s remained minimal at around 0.1 mb/d (0.3% share in early FY2026).
Historical Import Trends: A Decade of Shifts
Over the past ten years (2016-2025), import patterns for both countries have evolved dramatically, influenced by sanctions, wars, and market dynamics. Below are approximate annual average imports in mb/d, compiled from sources like EIA, Kpler, Vortexa, and trade data. These figures reflect reported and estimated volumes, accounting for underreported sanctioned flows.
China’s Crude Oil Imports by Source (mb/d)
|
Year
|
Venezuela
|
Iraq
|
Iran
|
Russia
|
|---|---|---|---|---|
|
2016
|
0.40
|
1.00
|
0.60
|
1.00
|
|
2017
|
0.40
|
1.10
|
0.60
|
1.20
|
|
2018
|
0.30
|
1.00
|
0.60
|
1.40
|
|
2019
|
0.30
|
1.10
|
0.30
|
1.50
|
|
2020
|
0.30
|
1.20
|
0.30
|
1.70
|
|
2021
|
0.30
|
1.00
|
0.60
|
1.60
|
|
2022
|
0.30
|
1.00
|
1.00
|
1.90
|
|
2023
|
0.40
|
1.20
|
1.10
|
2.10
|
|
2024
|
0.30
|
1.30
|
1.00
|
2.20
|
|
2025
|
0.47
|
1.10
|
1.61
|
1.80
|
Trends: Russia’s share surged post-2022 Ukraine invasion, peaking at 20% (2.2 mb/d) in 2024 before dipping in 2025 due to reduced discounts. Iran’s flows, often disguised, averaged 1-1.6 mb/d recently. Venezuela’s remained steady at 0.3-0.5 mb/d via independent “teapot” refiners. Iraq provided consistent baseline supply around 1 mb/d.
India’s Crude Oil Imports by Source (mb/d)
|
Year
|
Venezuela
|
Iraq
|
Iran
|
Russia
|
|---|---|---|---|---|
|
2016
|
0.30
|
0.80
|
0.25
|
0.01
|
|
2017
|
0.30
|
0.90
|
0.50
|
0.01
|
|
2018
|
0.30
|
1.00
|
0.45
|
0.01
|
|
2019
|
0.35
|
1.00
|
0.40
|
0.01
|
|
2020
|
0.10
|
0.80
|
0.00
|
0.01
|
|
2021
|
0.10
|
0.90
|
0.00
|
0.01
|
|
2022
|
0.10
|
0.90
|
0.00
|
0.60
|
|
2023
|
0.10
|
1.00
|
0.00
|
1.60
|
|
2024
|
0.10
|
0.90
|
0.00
|
1.80
|
|
2025
|
0.15
|
0.90
|
0.00
|
1.80
|
Trends: Iran’s share peaked at 12.7% (0.5 mb/d) in 2016-17 but dropped to zero post-2019 U.S. sanctions. Venezuela’s imports peaked at ~0.35 mb/d in 2019 (6.7% share) but fell to negligible levels. Russia exploded from <2% in 2021 to ~36% (1.8 mb/d) in 2024-25, displacing Middle Eastern suppliers. Iraq remained stable at 19-20% (0.9 mb/d).
These tables illustrate the pivot toward Russian oil in both countries, while sanctioned sources like Iran and Venezuela saw volatile flows. For visual representation, imagine line charts showing Russia’s steep rise post-2022, Iran’s decline in official data (but rebound via proxies), and stable Iraqi supplies. Venezuela’s line remains flat and low, with a slight uptick in 2025 for China.
Impact on Discounts for Chinese and Indian RefineriesHistorically, Chinese and Indian refiners benefited from deep discounts on sanctioned Venezuelan, Iranian, and Russian crudes—often $10-20 per barrel below benchmarks like Brent—due to limited buyer options and evasion costs. For instance, Venezuelan Merey crude traded at $15-20 discounts in 2024-25, appealing to teapots in Shandong and state refiners like Indian Oil Corp.
With Vitol and Trafigura now facilitating legitimate sales through U.S.-approved channels, the dynamics shift. The offered $8-8.50 discounts are narrower than previous shadow market deals, potentially increasing costs by $2-10 per barrel for buyers. This could squeeze refining margins, especially if global Brent prices remain above $70-80/bbl.
For China, where Venezuelan oil made up ~4-5% of seaborne imports in 2025, the change might push teapots toward Iranian or Russian alternatives, but at reduced discounts as supply normalizes. India, with minimal recent Venezuelan imports, stands to gain more access but at higher relative prices—potentially adding $1-2 billion annually to import bills if volumes scale to pre-sanction levels (e.g., 0.3 mb/d).
Geopolitically, this reduces reliance on sanctioned flows, aligning with U.S. pressures, but could pressure OPEC+ quotas if Venezuelan output ramps up.
As Stuart Turley often discusses on the Energy News Beat podcast, such shifts highlight the interplay of politics and energy security—Asia’s big buyers must balance cost, supply stability, and international relations.
Stay tuned for more updates on how this unfolds in global markets. For podcast discussions, check out Energy News Beat for deep dives into these trends.
Check out theenergynewsbeat.substack.com.
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