Hamid Mollazadeh
The US recent authorization allowing India to resume crude imports from Venezuela has sparked speculation that Washington may attempt a similar maneuver to curb China’s purchases of Iranian oil. Yet, despite global market jitters, Iran’s oil minister has reassured domestic stakeholders, “Do not worry about US deals with Iran’s oil customers.”
This confidence is grounded in market realities. Even if all of Venezuela’s oil were shipped to China, it would account for only a small fraction of the country’s total crude demand.
Moreover, heavy crude needed by the US Gulf Coast refineries and the Chinese independent refiners’ reliance on inexpensive sanctioned oil, known locally as teapot refineries, make it unlikely that Venezuelan barrels could replace Iranian crude.
Geopolitics and Market Volatility
The global oil landscape has shifted rapidly over the past month, with prices climbing 14 percent amid fluctuating supply routes.
The pace is such that a tanker traveling from the Americas to Asia may undergo multiple legal reclassifications before reaching its destination.
US policy has increasingly turned oil into a geopolitical lever. Last year, Washington imposed tariffs on India for importing Venezuelan crude, signaling the willingness to manipulate supply lines to achieve strategic goals, including limiting Russian and potentially Iranian oil exports.
India, a major buyer of Russian crude since the 2022 Russia-Ukraine conflict, is now diversifying its sources. Facing US pressure and tariffs, New Delhi is reducing imports from Russia below one million barrels per day, while increasing shipments from the Middle East, Africa and South America.
Data show that by December 2025, India’s imports from Russia fell to a two-year low, while OPEC’s share in its imports rose to an 11-month high.
Venezuelan Oil as a Strategic Lever
US control over Venezuelan crude, though recent, is increasingly being used to redirect global oil flows. Following the capture of Venezuela’s former president Nicolas Maduro by US forces in January, Washington announced that Caracas would export up to $2 billion worth of crude to the US, potentially limiting supplies available for China.
Analysts suggest that independent Chinese refiners, which rely heavily on discounted Venezuelan barrels, may pivot to Iranian and Russian crude instead.
Analysts emphasize that Venezuelan oil primarily affects China’s teapot refineries. “Access to discounted heavy crude may shrink, but ample supplies from Iran and Russia mean these refiners are unlikely to seek non-sanctioned barrels unless economically advantageous.
Iran: The Competitive Alternative
Kpler data reveals that China imported just 389,000 barrels per day of Venezuelan oil last year, roughly 4% of total seaborne crude imports.
Even if Venezuela exports its full one-million-barrel capacity to China, it would cover only a marginal share of demand.
Expanding Venezuelan production would take at least three to four years and key ports have already stopped loading crude destined for Asia since January.
For Chinese refiners, Iranian heavy crude remains the cheapest and most accessible alternative, discounted by around $10 per barrel against Brent.
Analysts predict that teapot refineries in China will increasingly turn to Iranian and Russian oil in the coming months, with other non-sanctioned sources such as Canada, Brazil, Iraq and Colombia supplementing demand.
US Leverage Has Limits
While Washington is attempting to deploy Venezuelan oil as a geopolitical instrument to reshape trade flows and influence buyers such as India, the same strategy faces clear structural limits in China.
Tehran’s position in the Chinese market rests not on political convenience but on hard market fundamentals: deeply discounted pricing, logistical familiarity, refinery compatibility and years of established commercial channels that have proven resilient under sanctions.
By contrast, Venezuela’s export capacity remains constrained, its supply reliability uncertain, and its crude increasingly redirected toward US refineries rather than Asian buyers.
More importantly, China’s independent refiners are driven by economics, not diplomacy. For these buyers, Iranian heavy crude remains one of the most cost-effective and technically suitable feedstock available, particularly at a time when margins are under pressure and alternative supplies offer little price advantage.
Even a full redirection of Venezuelan barrels would cover only a marginal share of China’s vast crude demand, underscoring the limited reach of Washington’s leverage.
In the current geopolitical and market landscape, Iran is not merely “holding its ground” in China—it remains structurally embedded in the country’s oil import system.
As long as Beijing prioritizes energy security and cost efficiency over political signaling, US efforts to engineer a displacement of Iranian crude are likely to fall short, leaving Tehran firmly positioned as a key heavy crude supplier to the world’s largest oil-importing nation.
