Global oil trader Vitol Group has started offering Venezuelan crude oil cargoes to Chinese buyers at a significantly narrower discount, signaling a potential shift in how the market values the South American nation’s heavy oil.
According to market sources, Vitol is marketing Venezuela’s Merey crude to refiners in China at discounts of around $5 per barrel against ICE Brent. The cargoes are expected to be delivered in the second half of April, subject to final agreements.
Why This Offer Is Important
Venezuelan crude, particularly Merey, has long been considered one of the cheapest heavy sour crudes in the world. In the past, especially before U.S. sanctions disrupted the country’s oil industry, these barrels were often sold at deep discounts of up to $15 per barrel to Brent on a delivered basis.
The current pricing shows a much tighter spread, suggesting that either buyer interest is improving or traders believe the risk associated with Venezuelan oil has eased compared to previous years.
China’s Role in Venezuelan Oil Trade
Asia — and China in particular — has historically been a key destination for Venezuelan crude, as many Chinese refiners are equipped to process heavy, high-sulfur oil. Even during periods of sanctions and logistical difficulties, China remained one of the few consistent buyers, often using indirect trade routes.
However, recent geopolitical developments and tighter enforcement around shipping and payments have reduced the flow of Venezuelan barrels into Asia, making new offers like Vitol’s closely watched by the market.
U.S. Licenses and Payment Structure
In recent years, Vitol has been operating under licenses issued by the U.S. Treasury, allowing it to lift Venezuelan crude under strict conditions. Under these arrangements, proceeds from oil sales are deposited into U.S.-controlled accounts, a structure designed to limit direct financial access while still allowing limited oil trade.
This framework has enabled global traders to cautiously re-engage with Venezuelan supply, while buyers assess whether pricing offsets the remaining political and logistical risks.
Market Outlook
The narrower discount offered by Vitol could have broader implications for the Asian heavy crude market:
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It may put price pressure on other discounted heavy grades competing for Asian demand.
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It suggests traders see renewed value in Venezuelan barrels, despite ongoing uncertainties.
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Chinese refiners may selectively return to Venezuelan crude if economics remain attractive.
Whether Chinese buyers accept these cargoes at tighter discounts will be a key indicator of how much confidence the market has in Venezuelan oil’s return to global trade flows.
Conclusion
Vitol’s latest offer marks an important test for Venezuelan crude in Asia. If buyers respond positively, it could signal the beginning of a gradual normalization of Venezuelan oil pricing — at least for select cargoes — after years of deep discounts and disrupted trade.