Venezuela firmly returned to the tanker market spotlight in 2025, as political developments and sanctions dynamics impacted crude flows and vessel demand. From a VLCC perspective Venezuela’s importance is no longer just about how many barrels are exported, but where those barrels go, what type of ships they move on, and whether those trades sit inside or outside the compliant market.
Venezuelan crude exports were highly volatile through 2025, but average flows have held around 850 kbd. The defining feature of the year was the concentration in destinations, with the majority of barrels moving into China. Historically, and particularly prior to the current sanctions regime, a much larger share of Venezuelan crude was absorbed by the US, with Europe also taking meaningful volumes. As exports to China increased, there was a sharp rise in the use of larger tankers, with VLCCs becoming the dominant vessel size loading in Venezuela. Over the same period, the share of Aframaxes had fallen away very quickly.
Against this backdrop, there is a growing amount of speculation about what comes next for Venezuela’s oil sector. The reality, however, is that after years of underinvestment and the structural degradation of oil infrastructure, it is difficult to make a credible case for a rapid production rebound. Even under a scenario in which international operators were able to re-enter the country, the more realistic near-term outcome would be stabilisation rather than growth. In practical terms, production could be held around 2025 levels, supporting exports in the 800 thousand to 1 million barrels per day range.
For the tanker market, the stabilisation scenario matters less than the question of destination. The key issue is not how much Venezuela produces, but where barrels would go if Venezuelan exports were normalised and returned to the mainstream market.
If the US were to step in and effectively take control of the Venezuelan oil sector, a significant share of exports would likely be absorbed into the US system. That would support shorter-haul flows and shift vessel demand back toward smaller segments, especially Aframaxes, rather than reinforcing today’s Venezuela-to-China VLCC trade. There is also scope for Europe to take some of these volumes, and that would point in the same direction: a greater weighting toward short-haul demand and smaller ships. The implication of such a shift is that China would be left short by roughly 600 thousand barrels per day. Those barrels would need to be replaced from elsewhere, and this is where the VLCC market impact becomes apparent.
From a fixtures perspective, Venezuela has increasingly become a shadow-market VLCC trade. Our fixtures data shows around eight VLCC fixtures per month in Venezuela during 2025, with most vessels discharging in China. These cargoes are sanctioned, and the vessels involved operate within the shadow fleet, even if they are not formally sanctioned themselves.
The age profile of the VLCCs lifting these cargoes in 2025 is heavily skewed toward older tonnage. We count around 70 individual VLCCs involved during the year, with a strong weighting toward vessels aged 20 years and above. This detail is important because it highlights a practical limitation in any trade normalisation scenario. If Venezuelan barrels were to re-enter the mainstream market, they would need to be carried on mainstream, compliant tankers. The ships currently servicing Venezuelan liftings are tainted by shadow fleet history and would struggle to re-enter commercial trading, particularly given the age profile of the fleet involved. In other words, even if the barrels normalise, the ships that have been carrying them are not automatically released back into the fully compliant trading pool in a way that improves mainstream supply availability.
This is why the core VLCC upside case from Venezuelan normalisation is not direct. In fact, a normalisation of trade could reduce direct VLCC demand out of Venezuela if barrels instead move to the US or Europe on smaller ship sizes. The key benefit would come indirectly, through the replacement demand generated as China sources alternative crude to cover the shortfall created by the loss of Venezuelan supply.
If China replaces sanctioned Venezuelan crude with mainstream barrels, those replacement barrels would be carried on compliant tonnage. Depending on origin, they could generate meaningful incremental demand for the mainstream VLCC fleet. Whether the barrels come from Canada, the Middle East, or elsewhere, replacement flows into China are structurally more likely to support VLCC utilisation because they sit inside the commercial fleet and trade finance system.
On a vessel-demand basis, even if assuming replacement barrels originate from the closest major supply region, the Middle East, an incremental 600 thousand barrels per day moving into China would lift VLCC demand by roughly 16 ships. Longer-haul replacement would push the demand impact higher still.
That said, China may not fully replace all lost Venezuelan volumes. Venezuelan crude has been attractively priced and has also been suitable for strategic stockbuilding. If access to those barrels is constrained and replacement grades are more expensive or commercially less flexible, China may choose to reduce intake rather than fully backfilling the deficit. In that scenario, the uplift to mainstream VLCC demand would be more limited.
The overall takeaway for tanker markets is that Venezuela is less a straightforward demand story and more a mechanism for dislocation between shadow and mainstream shipping. A shift back to normalised exports would likely support Aframaxes first, through shorter-haul destination changes. For VLCCs, the most constructive signal would come from China’s need to replace Venezuelan barrels with alternative imports. With sanctions and compliance tightening the divide between shadow and mainstream fleets, the real VLCC impact lies in the replacement flows into China rather than the Venezuela loading programme itself.
Data Source: Tankers International