A refinery in China [EPA Yonhap News]

Amid escalating pressure from the United States regarding China's imports of crude oil from Iran and Venezuela, there are projections that Chinese private refiners could be impacted and may respond by diversifying their import sources.

U.S. President Donald Trump announced on social media on the 4th (local time), following a phone call with Chinese President Xi Jinping, that one of the topics discussed was 'China's purchase of U.S. oil and natural gas.'

Prior to this, the Trump administration attacked Venezuela, holder of the world's largest oil reserves, on March 3rd, aiming to oust President Nicolas Maduro and gain influence over its oil resources.

The Trump administration issued comprehensive export-import permits for U.S. companies to trade Venezuelan crude oil, but Chinese, Russian, and Iranian companies remain blocked from trading due to U.S. sanctions.

President Trump also announced on January 12th that a 25% tariff would be imposed on all countries trading with Iran, a move interpreted as targeting China, which imports oil from Iran.

The Hong Kong media South China Morning Post (SCMP) reported that as the U.S. takes a strong stance against Iran and Venezuela, China, which had been purchasing crude oil from these countries at low prices, is facing pressure.

According to official Chinese government statistics, direct imports of crude oil from Iran and Venezuela are limited. China has not imported Iranian crude oil since 2023, and Venezuelan crude oil accounted for only about 0.1% of its total crude oil imports last year.

However, data from the commodity information firm Kpler shows a significant level of unofficial trade, with Iran exporting an average of 1.38 million barrels per day (bpd) of crude oil to Chinese companies last year.

The proportion of Iranian crude oil in China's total maritime crude oil imports was 14.5% in 2024 and 13% last year, while Venezuelan crude oil accounted for less than 4%.

Although China denies importing crude oil from Iran and Venezuela, the U.S. Energy Information Administration (EIA), under the Department of Energy, stated that a significant amount of Iranian crude oil in 2024 was being re-routed through Malaysia to China to evade sanctions.

Jun Xue, senior analyst at Sparta Commodities, stated, "(Private) independent refiners, unlike state-owned enterprises, have benefited from cheap crude oil from Iran, Venezuela, and Russia," and predicted that if Venezuelan imports are blocked, they will increase imports of the next cheapest options, Iran and Russia.

He added, "In a negative scenario, these refiners would have to rely on more expensive crude from Canada, Brazil, and the Middle East," which could lead to reduced refinery operating rates due to a lack of profit.

Aditya Saraswat of energy market analysis firm Rystad Energy also assessed that China's independent refiners would be most affected by U.S. tariffs on Iran, and that China is likely to increase its imports from Russia.

In contrast, Chen Li, senior analyst at the think tank Economist Intelligence Unit (EIU), viewed that while some of China's independent refiners are still exposed to Western sanctions, they generally have operational structures in place to mitigate these impacts.

Simu Wu, an analyst at Kpler, projected that heightened sanctions on Iranian crude oil would affect independent refiners purchasing it, but would have little impact on state-owned enterprises.

S&P Global Energy anticipates that China may diversify its crude oil import sources, utilize strategic reserves to mitigate short-term shocks, and implement policies to stabilize domestic supply and prices.