US intervention in Venezuela: Near-term impact on India’s oil import mix is unlikely, says official

In 2025, Venezuela’s share is India’s total crude oil imports was merely 0.6 percent.

• US intervention in Venezuela unlikely to affect India's oil imports in 1-3 years
• Few Indian refineries can process Venezuela's heavy, high-sulfur crude.
• Any increase in Venezuelan oil imports to India will be gradual and limited

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The U.S. intervention in Venezuela is unlikely to materially affect India’s oil market or alter its crude import strategy in the near term, that is, 1-3 years, but may have implications over the mid to long term, analysts and a senior government official told Moneycontrol on Monday.

"Venezuela’s crude oil share in India’s import basket is marginal. The present crisis is not going to affect India materially, or change the import mix anytime soon," the government official said.

"A stabilisation of Venezuela’s oil sector could allow limited volumes of discounted heavy crude to re-enter India’s import mix, primarily benefiting complex refineries. Venezuelan crude is predominantly heavy to extra-heavy and can be processed on a sustained basis by only a handful of Indian refineries, constraining system-wide intake," Sumit Ritolia, Lead Research Analyst at Kpler, said.

However, any impact is likely to be "incremental and dependent on sanctions policy and the pace of production recovery", added Ritolia.

In 2025, Venezuela’s share is India’s total crude oil imports was merely 0.6 percent, which averaged 28,000 barrels per day, Kpler data showed. In 2013, the country’s share in India’s crude oil basket was 12.4 percent, but this fell sharply from 2020 onwards, as a result of US sanctions on the South American country.

The sanctions remain till today, but if they are lifted post US' intervention in Venezuela’s oil industry, analysts say there could be a gradual increase in output and therefore imports to India.

India’s overseas arm, ONGC Videsh Ltd (OVL), jointly operates the San Cristobal oilfield in eastern Venezuela, but production has been severely curtailed as US restrictions blocked access to critical technology, equipment and services, leaving commercially viable reserves stranded. Once restrictions are lifted, OVL could revive output to 80,000-100,000 barrels per day, which has fallen currently to 5,000-10,000 barrels per day, they say.

However, given the nature of Venezuela’s crude (heavy and extra heavy), there is a limit to which it can be refined. Heavy and extra heavy are terms that essentially refers to the density and viscosity of the oil. These two categories have a very high sulfur content, which makes them sour and more difficult to refine into high-value products like gasoline.

"There are only a few refineries in India which was process Venezuela’s crude oil. Jamnagar is the only major refinery that can do it," noted Prashant Vashisht, Senior Vice President, ICRA.

"Also, there is a massive underproduction in Venezuela. First, the capacities and infrastructure has to be built in that country to increase output, so any benefit for India will be gradual, and not in the near term," he added.

Historically, sustained processing has been concentrated at Reliance’s Jamnagar complex and Nayara ’s Vadinar refinery, both configured to handle high-sulphur, heavy crudes. Limited volumes have also been processed intermittently at IOC’s Paradip refinery, Mangalore Refinery and Petrochemicals Limited (MRPL), and HPCL-Mittal Energy Limited (HMEL), but not all public-sector refineries currently have the configuration or operational flexibility to run this acidic (High TAN) and extra-heavy Venezuelan grades at scale, say analysts.

"Planned investments aimed at increasing complexity—such as upgrades at Vizag (already completed and commissioned)  and other refineries—could expand India’s ability to process Venezuelan heavy crudes, gradually broadening system-wide intake capacity. Until then, renewed Venezuelan supply would largely support a subset of Indian refiners, constraining aggregate intake potential despite improved availability," explained Ritolia.

Madan Sabnavis, Chief Economist at Bank of Baroda, says that price paid for Venezuela’s crude is one of the lowest and in FY25 was $496/tonne as against an average of $586/tonne. "But imports have turned even less significant subsequently. Besides if the story plays out as the US has said, there could be an increase, albeit marginal, in global supplies and prices should come down instead of going up. Besides, India buys at different prices from various countries, and the overall cost should not be different from what it is today."

On January 3, the US abducted Venezuela's President Nicolás Maduro and flew him out to face charges, such as Narco-Terrorism Conspiracy, Cocaine Importation Conspiracy, among others, in a US court. US President Donald Trump announced that US oil companies will invest an unspecified amount to revive the oil infrastructure in the South American nation and increase its oil output, enabling higher crude flows to the US and other markets.