Azernews.Az

by Alimat Aliyeva

The final tankers loaded with sanctioned Venezuelan oil before the U.S. blockade and the ousting of Nicolás Maduro are expected to reach China in the coming days, effectively ending years of ultra‑cheap crude supplies to Chinese buyers, Azernews reports, citing foreign media.

According to tanker‑tracking data from Vortexa and Kpler, cited by Bloomberg, two vessels carrying a total of roughly 3.8 million barrels of Venezuelan crude are currently en route east of the Cape of Good Hope. These shipments are widely seen as the last sanctioned and deeply discounted Venezuelan crude destined for China.

Meanwhile, about 24 million barrels of Venezuelan crude and fuel oil remain in floating storage off the coasts of Malaysia and Singapore, down from nearly 30 million barrels earlier this month as some volumes have already been claimed by buyers.

For years, China’s independent refiners — the so‑called teapots — benefited from these cut‑price barrels, helping to sustain their margins. But once these last cargoes are absorbed over the next month or two, Chinese refiners will likely have to pay international market prices for Venezuelan crude, as exports are now regulated under U.S. control.

Under new arrangements, U.S. Treasury licenses allow major oil trading houses to sell Venezuelan oil openly, meaning future sales will be above board and priced at market‑related levels. Traders familiar with recent offers say discounts have already narrowed significantly — for example, Venezuelan Merey heavy crude has been offered at roughly $5 per barrel below ICE Brent, far less generous than the up to $15 per barrel discounts seen prior to the U.S. actions.

This marks a dramatic shift from past years when China was the primary destination for sanctioned Venezuelan crude shipped via a “shadow fleet” of vessels operating outside traditional reporting systems. Analysts suggest that the closure of this loophole could push China to diversify its heavy crude supply, turning more to sources such as Russia, Iran, or OPEC producers — potentially reshaping global crude trading patterns and pricing dynamics.