Chinese independent refiners are expected to increasingly rely on Iranian heavy crude in the coming months, as Venezuelan oil shipments to China stall after the United States moved to redirect Venezuelan exports, traders and analysts told Reuters.
Venezuelan crude flows to China are expected to shrink after President Donald Trump said on Tuesday that Washington and Caracas agreed to allow up to $2 billion worth of Venezuelan oil exports to flow to the United States after the US capture of Venezuelan President Nicolas Maduro over the weekend.
China imported about 389,000 barrels per day of Venezuelan oil in 2025, roughly 4% of its total seaborne crude imports, according to Kpler data.
The shift is set to disrupt supply for China’s independent refiners, known as “teapots,” which depend heavily on discounted sanctioned oil. China, the world’s largest crude importer, is a major buyer of cut-price supplies from Iran, Russia and Venezuela, and teapots are among the biggest consumers of those barrels.
Kpler senior analyst Xu Muyu said teapots that process Venezuelan oil are expected to switch mainly to Russian and Iranian grades in March and April, adding that Iranian Heavy remains the cheapest alternative, trading at discounts of about $10 a barrel to Brent.
“The Venezuela situation hits China’s independent refineries the hardest, as they may lose access to discounted heavy barrels,” Reuters quoted Sparta Commodities analyst June Goh as saying.
She added that ample availability of Russian and Iranian crude means teapots are unlikely to bid aggressively for non-sanctioned oil, as higher prices would undermine margins.
China is widely seen as Iran’s largest oil buyer, with Iranian crude continuing to reach Chinese refiners despite US sanctions. Beijing opposes unilateral sanctions and says its energy trade is conducted in line with its laws and international obligations
The euro was trading around 1.72 million rials and the pound at about 19.94 million rials, traders said.
The latest slide follows sharp swings since late December, when the currency’s plunge helped trigger protests in Tehran and other cities that have increasingly taken on a broader political edge.
The government has floated new relief measures after moving to curb access to subsidized foreign exchange used for importing basic goods, a system critics say has fueled distortions and rent-seeking while failing to contain inflation.
President Masoud Pezeshkian’s administration has signaled it will shift support toward households, including a proposed monthly electronic credit or coupon scheme aimed at cushioning low-income families from price rises as the subsidy regime is rolled back.
Iran’s economy has been hit by years of sanctions and chronic inflation, and many Iranians turn to hard currency and gold as stores of value during bouts of political and economic uncertainty.
