Prior to the U.S. action, barrels were offered to Chinese refiners at discounts as wide as US$15 a barrel
One of China’s largest regular buyers of Venezuelan crude is making bids for Canadian cargoes as a replacement, after United States intervention in the Latin American country upended global flows and lifted prices.
Shandong Chambroad Petrochemicals Co. has offered to buy Canadian Cold Lake oil at a discount of about US$5 a barrel to ICE Brent on a delivered basis to China for May, according to people familiar with the deal, who asked not to be named as they are not authorized to speak to the media.
No deal has yet been agreed. Recent deals of the grade were closed with Chinese buyers at discounts of about US$4 a barrel to ICE Brent, traders said.
Chambroad did not respond to an email seeking comment and calls to the company were unanswered.
The private refiner’s bid comes as China explores alternatives to Venezuela’s Merey, a heavy crude that previously traded at deep discounts due to U.S. sanctions. Since Trump’s blockade and the seizure of dark-fleet tankers involved in ferrying the country’s oil, China-bound flows have dwindled, with Western traders moving shipments to Europe and the Caribbean. They have also offered supplies to Asia at much narrower discounts.
Prior to the U.S. action, when Venezuelan oil was sold via a clandestine network, barrels were offered to Chinese refiners at discounts as wide as US$15 a barrel.