India Eyes Venezuelan Crude as Reliance Considers Renewed Purchases

India’s largest oil refiner, Reliance Industries, has indicated a potential shift in its procurement strategy by considering the purchase of Venezuelan crude once again, contingent on U.S. policy changes. This possible reopening of trade comes as the United States has moved to allow limited Venezuelan exports following the capture of Venezuelan leader Nicolas Maduro. Reliance had previously halted imports of Venezuelan oil in early 2024 as the U.S. sanctions waiver was set to expire.

The company’s last shipment from Venezuela arrived in May 2024, just before the sanctions took full effect. Reliance operates the world’s largest refining complex in Gujarat, which is particularly well-suited for processing heavy crude grades like Venezuela’s Merey. Industry analysts suggest that if restrictions on Venezuelan oil sales are eased, other state-run refiners in India, including Indian Oil Corp and Hindustan Petroleum, may also consider re-entering the market.

While no commitments have been made, India is keenly interested in Venezuelan oil, particularly if the pricing is favorable and political circumstances allow. This approach aligns with India’s historical strategy in oil procurement, where practical considerations often outweigh ideological factors. As a major net importer of oil, India has typically prioritized price, availability, and compatibility with its refining capacity, particularly when navigating the complex landscape of international sanctions.

The surge in India’s purchases of discounted Russian crude following Russia‘s invasion of Ukraine illustrates this strategy. India has become one of the largest buyers of Russian oil at significantly reduced prices, a move that has helped manage its import costs despite mounting Western pressure. In recent months, Reliance has also indicated a possible reduction in its intake of Russian oil due to rising compliance risks, underscoring the fluidity of its sourcing strategy.

Venezuelan crude presents an alternative that Indian officials have been considering for several months. New Delhi has communicated to U.S. officials that it could lessen its dependency on Russian oil if permitted to buy from both Venezuela and Iran. Indian representatives have cautioned that a complete cutoff from all sanctioned suppliers could inadvertently drive global oil prices higher, a scenario that Washington is keen to avoid.

For India, securing discounted heavy crude not only bolsters refinery economics but also diversifies its supply chain amid rising trade risks. From Washington’s perspective, facilitating the purchase of Venezuelan oil could relieve pressure on its allies while simultaneously diminishing reliance on Russian barrels. Should Venezuelan oil become legally accessible and attractively priced, it would simply enhance India’s procurement strategy, which is characterized by adaptability and necessity.

As the global oil landscape continues to evolve, India’s procurement practices remain rooted in pragmatic considerations. The prospect of re-engaging with Venezuelan oil, should conditions permit, reflects a broader trend of flexibility in energy sourcing that is likely to persist in the coming months.