US–Venezuela Tensions Fuel Global Crude Worries, But India’s Exposure Remains Limited; Here’s Why

US President Donald Trump has jolted global markets after ordering airstrikes on Venezuela and detaining President Nicolás Maduro on charges related to narco-terrorism and drug trafficking. Given Venezuela’s status as the country with the world’s largest proven oil reserves, the escalation has sparked concerns about potential fallout for major economies, including India.

However, the economic impact on India is expected to be minimal. The Global Trade Research Initiative (GTRI) said India’s exposure to Venezuela has sharply diminished over the years due to US sanctions.

“India faces negligible impact, as trade with Venezuela has collapsed under sanctions, with crude imports down 81.3 per cent in FY2025 and overall bilateral trade remaining marginal,”

GTRI founder Ajay Srivastava told PTI.

India–Venezuela trade in decline

India was once a major buyer of Venezuelan crude, importing over 400,000 barrels per day at the peak during the 2000s and 2010s. That relationship weakened significantly after US sanctions were imposed in 2019, prompting India to cut oil imports and scale back commercial engagement to avoid secondary sanctions, Srivastava said.

In FY2025, India’s total imports from Venezuela stood at $364.5 million, of which $255.3 million was crude oil. This marked an 81.3 per cent drop from crude imports worth $1.4 billion in FY2024. India’s exports to Venezuela were limited to $95.3 million, including pharmaceutical shipments valued at $41.4 million.

“Given the low trade volumes, existing sanctions constraints, and the large geographical distance, the current developments in Venezuela are not expected to have any meaningful impact on India’s economy or energy security,” Srivastava was quoted as saying by PTI.

Venezuela accounts for roughly 18 per cent of global oil reserves, surpassing Saudi Arabia (around 16 per cent), Russia (5–6 per cent), and the United States (about 4 per cent).

Potential upside for India

Industry sources and analysts cited by PTI suggest that a US-led intervention or restructuring of Venezuela’s oil sector could, in fact, benefit India. Such a scenario could help unlock nearly $1 billion in long-pending dues owed to Indian entities and revive production in oilfields where India has existing stakes.

ONGC Videsh Ltd (OVL) holds a 40 per cent stake in the San Cristobal oilfield in eastern Venezuela. US sanctions have restricted access to critical technology, services and equipment, leaving commercially viable reserves underutilised.

Venezuela has also withheld dividend payments of $536 million due to OVL up to 2014, with a similar amount pending for subsequent years, after the country refused to allow audits, effectively freezing India’s claims.

Officials familiar with the matter said that easing sanctions could allow OVL to redeploy rigs and equipment from ONGC’s oilfields in Gujarat to San Cristobal, where production has fallen to just 5,000–10,000 barrels per day. With additional wells and modern equipment, the onshore field has the potential to produce between 80,000 and 1,00,000 barrels per day, they added, noting that ONGC already owns rigs suitable for such operations.