SEATTLE (Oil Monster): Chinese independent refiners are buying discounted Iranian heavy crude to replace Venezuelan shipments that have stalled after the U.S. claimed control of the OPEC producer last month, two people with knowledge of the matter said on Monday.
The drawdown of Iranian oil held in storage is making up for the drop in Venezuelan supply to the world's largest crude importer, they said.
Venezuelan shipments to China have fallen sharply since mid-December after U.S. President Donald Trump imposed a blockade on sanctioned ships, part of a campaign against President Nicolas Maduro which culminated in his capture by U.S. forces on January 3. Trump has said the U.S. intends to control Venezuela’s oil sales and revenues indefinitely.
Washington has assigned global trading firms Vitol and Trafigura to sell up to 50 million barrels of Venezuelan oil which state firm PetroChina held off from buying as it assessed the U.S.-controlled purchases.
TEAPOTS SEEK IRANIAN HEAVY AND PARS CRUDE
China's independent refiners, who used to be the biggest buyers of Venezuelan crude, have snapped up Iranian heavy crude stored in bonded storage tanks in China and on ships, the sources said.
The refiners, known as teapots and mostly based in the country's eastern Shandong province, prioritised purchases of sanctioned crude because of steep discounts, rather than buying Venezuelan cargoes marketed by Vitol or Trafigura, or heavy grades from Canada, traders said.
Courtesy: www.reuters.com
