Two nitrogen-fixing and heavy oil degrading strains, designated RWY-5-1-1^T and ROY-1-1-2, were isolated from an oil production mixture from Yumen Oilfield in China. The 16S rRNA gene sequence showed they belong to Azospirillum and have less than 96.1 % pairwise similarity with each species in this genus. The average nucleotide identity and digital DNA-DNA hybridization values between them and other type strains of Azospirillum species were less than 75.69 % and 22.0 %, respectively, both below the species delineation threshold. Pan-genomic analysis showed that the novel isolate RWY-5-1-1^T shared 2145 core gene families with other type strains in Azospirillum, and the number of strain-specific gene families was 1623, almost two times more than the number known from other species. Furthermore, genes related to nitrogenase, hydrocarbon degradation and biosurfactant production were found in the isolates’ genomes. Also, this strain was capable of reducing acetylene to ethylene at a rate of 22 nmol ethylene h^-1 (10⁸ cells) and degrading heavy oil at a rate of 36.2 %. The major fatty acids and polar lipids were summed feature 8 (C_18:1ω7c/C_18:1ω6c), and phosphatidylethanolamine, diphosphatidylglycerol, phosphatidylglycerol, and phosphatidylcholine. Furthermore, a combination of phenotypic, chemotaxonomic, phylogenetic and genotypic data clearly indicated that strains RWY-5-1-1^T and ROY-1-1-2 represent a novel species, for which the name Azospirillum oleiclasticum sp. nov. is proposed. The type strain is RWY-5-1-1^T (=CGMCC 1.13426^T =KCTC 72259 ^T). Azospirillum novel strains with the ability of heavy oil degradation associated with the promotion of plant growth has never been reported to date.