“Tired of Unstable Russian Oil, One Nation Declares Readiness to Buy Venezuelan Crude”

On January 8th, Reliance Industries announced it is considering resuming crude oil purchases from Venezuela, highlighting the rapid shifts in global oil trade dynamics following the U.S. decision to allow limited exports of Venezuelan crude.

Reliance, operator of the world’s largest refining complex, halted Venezuelan oil imports in early 2024 as U.S. sanctions waivers were set to expire. Their last shipment arrived in May 2024. The company’s massive Gujarat refineries are well-suited to process heavy crudes like Venezuela’s Merey, making these barrels attractive when discounts are substantial.

Industry sources suggest state-owned refiners, including Indian Oil Corp and Hindustan Petroleum, may also consider Venezuelan crude if restrictions ease further. While no commitments have been made, India’s interest would likely grow if Venezuelan oil re-enters the market at competitive prices with political backing.

This stance aligns with India’s longstanding approach to oil procurement. As a major net importer, price, supply reliability, and refinery compatibility typically outweigh geopolitical considerations, within the limits of sanctions.

India’s purchases of discounted Russian crude exemplify this strategy. Since the Russia-Ukraine conflict began, India has become one of the world’s largest buyers of Russian oil, a move defended as essential for managing import costs. Reliance itself significantly increased Russian oil imports during periods of steep discounts, even amid growing Western pressure. Only recently has the company signaled a pullback, citing rising compliance risks.

Venezuela offers an alternative Indian officials have quietly advocated for months. New Delhi has told U.S. partners it could reduce reliance on Russian crude if allowed to source oil from Venezuela and Iran.

For India, discounted heavy crude improves refinery economics and supply diversification—a welcome opportunity amid rising trade risks. For Washington, permitting Venezuelan oil purchases could ease pressure on allies while diverting demand away from Russian supplies.