Trafigura, Vitol push Venezuelan crude into Asia as Iran war chokes Gulf supply

Trafigura and Vitol Expand Venezuelan Oil Sales to Asia as Iran War Disrupts Gulf Supplies

Commodity trading giants Trafigura Group and Vitol Group are ramping up sales of Venezuelan crude oil to buyers across Asia, seizing on rising production from the South American nation as the ongoing conflict with Iran continues to throttle oil flows through the Strait of Hormuz.

South Korea and Malaysia Enter the Picture

Trafigura has offered Venezuela’s flagship Merey 16 crude to refiners in South Korea, according to Bloomberg, which first reported the expansion on Wednesday. South Korea last imported Venezuelan crude in 2001, making the prospective deal a historic shift for the country’s energy supply chain. Seoul has been actively seeking to diversify crude sources amid sustained Middle Eastern disruption.bloomberg

Separately, a supertanker called the Solana, chartered by Vitol, unloaded two million barrels of Merey 16 into floating storage off Malaysia’s coast. Trafigura also recently delivered oil to a Malaysian refinery. The traders have made fresh offers to Indian refiners at discounted prices.themalaysianreserve

Iran War Reshapes Global Oil Flows

The push into Asia comes as the war with Iran — which began with U.S. and Israeli strikes on February 28 — continues to choke one of the world’s most critical oil chokepoints. Traffic through the Strait of Hormuz, which previously carried roughly 15.6 million barrels per day, has fallen to an estimated 15% of pre-war levels, according to JPMorgan analysts cited by CNN. The disruption has cut off established Middle Eastern supply routes to major Asian importers like South Korea and Japan.cnn

Saudi Arabia has partially compensated by redirecting shipments through its East-West Pipeline to the Red Sea, but the alternative remains vulnerable to Iranian threats against the Bab el-Mandeb Strait.cnbc

Venezuelan Production Rebounds

Venezuela’s oil output has climbed past one million barrels per day for the first time in over seven years, with OPEC secondary sources placing April production at 1.031 million bpd. PDVSA reported output of 1.136 million bpd in April, up from 942,000 bpd in January. The U.S. Energy Information Administration has projected production could return to pre-blockade levels by mid-2026.reuters

Trafigura and Vitol began marketing Venezuelan oil to Asian refiners in January after reaching agreements with the U.S. government to help export stranded crude. Early deals included sales to India’s state refiners Indian Oil Corporation and Hindustan Petroleum, as well as direct purchases by Reliance Industries. Physical crude prices have softened thanks to robust U.S. exports, emergency reserve releases, and slowing Chinese demand, giving Venezuelan heavy crude — offered at steep discounts to Brent — an opening in markets that previously showed little interest.reuters