Oil traders expect that Asia imports more Venezuelan oil if U.S. sanctions strike

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So traders and analysts believe, since exports from a South American member of OPEC can be redirected to the region, filling the vacuum left after a reduction in supply of producers.

Washington is considering sanctions on Venezuela's oil industry in response to the suppression of the ruling Socialist Party officials and parties opposing the government. An embargo against Venezuelan crude could block imports of about 740,000 barrels per day to the U.S.

Asian refiners would welcome the so-called heavy, or higher density, crude since production cuts by the OPEC have mainly reduced this type of oil. At the same time, the launch of new oil processing facilities is raising demand.

China and India, the two biggest buyers of Venezuelan oil after the U.S., have the opportunity to increase imports, while other refineries in North Asia, with equipment difficult enough to handle heavy Venezuelan oil, are looking for opportunities to use this offer, analysts and traders said.

Venezuela's main creditors China and Russia will have first priority to its oil if sanctions are imposed, the sources and analysts said, and the countries would likely make the surplus cargoes available in the spot market.

Russian oil firms Rosneft and Lukoil are also receiving about 250,000 bpd to repay loans, according to the PDVSA reports.

PDVSA has cut sales to U.S. refining unit Citgo Petroleum since May to increase its supply to Rosneft in order to catch up on overdue Russian deliveries.

One Asian trader, who deals with Venezuelan oil, said Rosneft can ship Venezuelan oil to its recently acquired Essar Oil refinery in India and that any surplus can be re-sold by Russian companies to other Asian buyers.