New Delhi: The recent ousting of Venezuelan President Nicolas Maduro by a U.S.-backed operation, along with plans for American companies to take control of Venezuela’s oil sector, has startled global energy markets.
For India, a huge crude oil buyer, this development comes at a tricky time. President Trump is also threatening higher tariffs on Indian exports due to India’s continued purchase of discounted Russian oil. Interestingly, between 2025 and 2026, India’s crude oil imports from the U.S. jumped almost 92%, although Russia remained the biggest supplier.
India’s oil import data tells a compelling story. From April to November last year, India imported 178.1 million tonnes of crude oil, with 60 million from Russia and 13 million from the U.S. In contrast, the previous year, the country brought in 165 million tonnes, with 62.4 million from Russia and only 7.1 million from the U.S.
This mix of imports significantly affects India’s inflation, refinery operations, currency dynamics, and geopolitical strategy. The U.S.’s approach—tying oil imports from Russia to potential tariffs and seeking control over Venezuelan oil—poses complicated challenges for India.
Trump has praised Prime Minister Modi, calling him “a very good man,” while making it clear that the U.S. is prepared to quickly impose tariffs if necessary. His comments coincided with U.S. Senator Lindsey Graham advocating for strict tariffs on countries buying Russian oil if Moscow doesn’t pursue peace in Ukraine soon.
Higher tariffs would make it more difficult for Indian exporters in the U.S. market, risking job losses and shrinking India’s trade with its major Western partner. This approach indicates a significant shift: the U.S. sees energy sourcing—particularly Russian crude imports—as a major issue linked to international relations, not just business.
Before the Ukraine conflict, West Asia was a key supplier of crude to India, which needs around five million barrels a day. However, India turned to Russian crude for its discounted rates post-2022, helping to lower fuel costs for consumers, even though it requires specific refinery setups.
Historically, India has aimed for strategic independence in its energy choices. Official statements emphasize that market forces—not geopolitical pressures—drive its oil purchase decisions.
A U.S.-led revival of Venezuelan oil production could be beneficial for Indian state-owned oil companies. This could help recover approximately $1 billion in overdue payments and restart Indian-operated oil fields in Venezuela.
ONGC Videsh Limited (OVL) has invested around $200 million in a joint venture with Venezuela’s state-owned company. However, Venezuela owes OVL significant dividends, creating a complicated financial situation.
In the past, once nationalized under Hugo Chavez, Venezuela’s oil sector became an arena for geopolitical struggles. U.S. companies once thrived in Venezuela, but the political landscape has shifted dramatically since then.
If U.S. firms manage to restart oil production in Venezuela, India could gain another reliable source of crude. However, re-establishing this supply chain won’t happen overnight and will depend on various legal and political aspects.
Even with rising imports from the U.S., the volume remains small compared to total requirements. U.S. crude is generally lighter and not ideally suited for Indian refineries, which may face challenges in adapting.
As the U.S. links oil trades to tariffs and the situation in Venezuela evolves, energy security becomes a key issue for India. The decision to import Russian oil is now deeply tied to global trade dynamics, geopolitical alliances, and domestic economic health. Balancing these elements will require careful planning and diplomacy to ensure ongoing growth in an increasingly complex global energy scenario.
For further insights into the implications of these developments, check out this detailed report.
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VENEZUELA, INDIA, RUSSIA, USA, INDIAN FUEL, WHY WASHINGTON’S VENEZUELA PUSH AND RUSSIA PRESSURE MATTER FOR INDIA’S FUEL BILL
