China’s Oil Dependence: The Impact of Venezuela and Iran on Beijing’s Energy Strategy

China, the world's largest crude oil importer, has become heavily reliant on Iranian oil, purchasing over 80% of Iran's exports, which amounted to approximately 1.38 million barrels per day in 2025. This reliance exposes China to significant geopolitical risks, particularly in light of U.S. sanctions aimed at curbing Iran's nuclear ambitions. The independent refiners in China, known as "teapots," primarily drive this demand due to the discounted prices of Iranian crude, which trades at $8 to $10 below global benchmarks. However, the U.S. sanctions have led to a complex web of relabeling and transshipment practices, with Chinese customs data showing no direct oil shipments from Iran since July 2022.

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In parallel, Venezuela has been a critical supplier for China, with oil exports accounting for about 4% of China's total seaborne crude imports. The recent U.S. military operation that captured Venezuelan President Nicolás Maduro has introduced uncertainty into this relationship. The U.S. aims to reassert its influence in Latin America, pressuring Venezuela to sever ties with China and Russia, which could disrupt China's access to Venezuelan oil.

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The U.S. military's actions in Venezuela are perceived as a direct challenge to China's growing influence in the region. President Donald Trump has made it clear that the U.S. will not allow adversaries like China to operate freely in its "backyard." This military intervention has raised questions about China's ability to protect its interests in Latin America, particularly as it has invested heavily in Venezuela's oil sector, providing over $100 billion in loans since the early 2000s.

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Chinese scholars have noted that the U.S. actions serve as a warning to other nations in the region, emphasizing that any country aligning too closely with U.S. competitors risks becoming a target. This has led to discussions within China about adopting a more assertive stance in Latin America to safeguard its interests.

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Critics of the U.S. approach argue that demanding Venezuela cut ties with China and Russia could escalate tensions and provoke retaliation. Some U.S. lawmakers express concern that such a strategy may backfire, complicating efforts to establish a legitimate government in Venezuela. They caution against treating Venezuelan oil as a mere asset for U.S. interests, emphasizing the need for a balanced approach that considers the sovereignty of the Venezuelan people.

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The Chinese government has condemned the U.S. military operation in Venezuela, asserting that its economic ties with the country are protected under international law. Chinese officials have reiterated their commitment to maintaining friendly relations with Latin America, despite the challenges posed by U.S. actions. The Chinese embassy in Washington characterized the U.S. approach as "unilateral, illegal, and bullying."

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There is a notable discrepancy in the assessment of how much Venezuelan oil China imports. While some reports indicate that Venezuelan oil accounts for a small percentage of China's total imports, others highlight the strategic importance of these supplies for China's independent refiners. Furthermore, the future of these imports remains uncertain, particularly in light of the U.S. blockade and the potential for a shift in Venezuela's political landscape.

Venezuela’s China Oil Trade Enters New, Painful Phase

As the situation evolves, China may need to reassess its energy strategy in light of increased U.S. scrutiny and potential sanctions. The future of Venezuelan oil exports to China is likely to become more constrained, with traders and refiners facing heightened risks. This could lead to a gradual decline in the volume of Venezuelan oil reaching China, prompting refiners to explore alternative sources or adjust their operations to mitigate risks associated with sanctioned oil.

Venezuela’s China Oil Trade Enters New, Painful Phase