India May Buy $15 Bn Worth Of Venezuelan Oil This Year
India’s growing reliance on Venezuelan crude comes amid US pressure on New Delhi to reduce purchases of Russian oil and buy more American and Venezuelan supplies.
Chennai: India’s oil imports from Venezuela surged to $3.6 billion in the first five months of FY27, against $255 million in the entire previous fiscal. If purchases continue at this pace, imports could exceed $15 billion this year, raising concerns over India’s exposure to US policy shifts and the risks of fresh investments in Venezuela’s oil sector, said Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI).
India’s growing reliance on Venezuelan crude comes amid US pressure on New Delhi to reduce purchases of Russian oil and buy more American and Venezuelan supplies. Russia’s share of India’s oil imports, which was below 15% before the Ukraine war, peaked at 51% in July before declining to 45% in August. Meanwhile, Gulf countries’ share fell from 55-60% to less than 30% following supply disruptions.
Srivastava said India must assess whether the shift in sourcing serves its commercial interests rather than respond to geopolitical pressure. India imports around 90% of the oil it consumes, making reliable supplies and competitive prices critical to energy security.
He cautioned against fresh investments in Venezuela, citing India’s previous experience. Between 2010 and 2015, ONGC Videsh collaborated with Venezuela’s state-owned oil company. Subsequent US sanctions against the Venezuelan company affected Indian investments, while private-sector companies, including Reliance, also suffered losses because of sanctions.
“Buying oil from a supplier is one thing; committing billions of dollars to develop oil fields is another,” he said, pointing to the risks of long-term investments amid uncertain US policies.
Venezuela’s oil fields are in poor condition, with production estimated at about one-third of their potential. Restoring the sector could require around $100 billion in investment and take seven to 10 years, according to estimates cited by Srivastava. He also noted that companies such as Reliance, despite their refining capabilities, are not primarily oil exploration and production businesses.
Although Venezuelan crude is cheaper, its heavy, and low-grade nature increases processing requirements and can reduce yields. India paid about $820 per tonne for Saudi Arabian oil between April and August, while Venezuelan oil was around 25% cheaper. However, refining costs and product yields must also be considered when assessing its overall economic viability.
Srivastava said India should buy oil wherever it is competitively priced without entering arrangements that restrict its choices. He also called for energy purchases and US trade negotiations to be handled separately, with decisions guided by India’s economic interests and energy security rather than external pressure.
