India Evaluates Venezuelan Crude Imports as Russian Supply Risks Intensify

India’s largest refiner has indicated potential interest in resuming Venezuelan crude purchases, contingent upon approval from Washington for sales to non-US buyers. This development follows recent political changes in Venezuela and reflects broader shifts in global oil trade dynamics.

Reliance Industries confirmed on Thursday that it would evaluate Venezuelan crude acquisitions if permitted for non-US purchasers. The company, which operates the world’s largest refining complex, ceased Venezuelan oil imports in early 2024 ahead of the expiry of US sanctions waivers. Its final Venezuelan cargo arrived in May of that year.

The Gujarat-based refineries operated by Reliance are technically configured to process heavy crude grades such as Venezuela’s Merey, making such barrels commercially attractive when offered at sufficient discounts. Industry sources suggest that state-controlled refiners, including Indian Oil Corporation and Hindustan Petroleum, may similarly consider Venezuelan crude should restrictions ease. However, no firm commitments have been announced.

India’s pragmatic approach to crude procurement has historically prioritised price, availability and refinery compatibility over geopolitical considerations, within the constraints of international sanctions frameworks. As a significant net importer, New Delhi has maintained flexibility in its sourcing decisions.

The country’s approach to Russian crude purchases exemplifies this strategy. Following Russia’s invasion of Ukraine, India emerged as one of the largest buyers of discounted Russian barrels, a decision defended as necessary for managing import costs. Reliance substantially increased its Russian crude intake during the peak discount period, despite mounting Western pressure. The company has recently signalled a reduction in Russian purchases, stating it would not take Russian oil in January as compliance risks escalate.

Venezuelan crude presents an alternative supply source that Indian officials have discussed informally for several months. New Delhi has communicated to US counterparts that it could reduce dependence on Russian crude if permitted to source oil from Venezuela and Iran, cautioning that simultaneously severing access to all sanctioned suppliers could exert upward pressure on global prices. This scenario represents a concern for Washington.

For India, access to discounted heavy crude enhances refinery margins and diversifies supply channels, providing valuable optionality as trade risks proliferate. For the United States, authorising Venezuelan oil purchases could alleviate pressure on allied nations whilst redirecting demand away from Russian barrels.

Should Venezuelan oil become legally available at competitive pricing, it would represent another instrument in India’s procurement strategy, which remains fundamentally driven by economic necessity and supply security considerations.