Middle East shocks test China’s reliance on discounted Iranian and Venezuelan oil
Mar 10th 2026
Rising Iran-related risks and constrained Venezuelan flows threaten cheap heavy crude that fuels China’s independent refineries, forcing sourcing shifts and possible run cuts even as offshore stocks and more Russian barrels offer temporary relief.
- China imported about 11.6 million barrels per day in 2025, with roughly 2.6 million bpd of those classified as discounted or sanctioned crude, including about 1.38 million bpd from Iran, according to the Center on Global Energy Policy.
- Escalating strikes involving Iran have pushed oil prices higher and increased the risk of disruptions to Iranian crude flows that many Chinese refiners rely on.
- Kpler estimates about 50 million barrels of Iranian crude are currently in storage or transit near China and Malaysia, providing a short term cushion against immediate supply shocks.
- Independent Shandong refiners depend heavily on discounted Iranian and Venezuelan heavy crude and could face refinery run cuts or expensive replacement purchases if those supplies tighten, analysts say.
- Russia has been supplying more discounted crude to China recently, helping to offset some Iranian shortfalls but not fully replacing the grades used by smaller refiners.
- China’s petrochemical sector is less exposed because major state owned firms and naphtha imports supply most feedstock, and rising EV adoption is reducing gasoline and diesel demand by roughly 200,000 bpd per year, which may blunt longer term price pressure.