Micah Jonah
February 2, 2026
Chinese independent refiners, commonly known as teapots, are increasingly buying discounted Iranian crude oil to replace supplies from Venezuela that have fallen sharply in recent weeks, according to sources familiar with the matter.
The refiners are drawing on Iranian oil held in storage tanks and on ships, following disruptions to Venezuelan shipments after the United States asserted control over Venezuela’s oil exports last month. The decline in Venezuelan supply has forced Chinese buyers to seek alternative sources to meet demand.
Venezuelan crude shipments to China dropped significantly from mid-December after Washington imposed restrictions on sanctioned vessels as part of its actions against the government of President Nicolas Maduro. The United States has since indicated plans to oversee Venezuela’s oil sales and revenues.
Sources said Iranian heavy crude has emerged as the preferred replacement due to its lower price. Supplies of Iranian oil stored in Asia are being gradually drawn down to offset the shortfall from Venezuela.
Data showed that Venezuelan-origin crude held in floating storage in Asia declined sharply in January, while Iranian oil inventories also dipped during the same period as demand from Chinese refiners increased.
The shift highlights changing crude oil trade flows in Asia as refiners adjust to geopolitical developments affecting major oil-producing countries.
