As Venezuela continues to dominate global headlines, questions mount as to what it could mean for India’s energy market. New Delhi, which is facing US tariffs imposed by President Trump for its continued
purchase of Russian oil, is keen to stitch up an FTA deal with the Americans. Experts believe that conditions or the deal may include increased purchase of American oil, something that the US president has repeatedly called on India to do.
The question then arises: would Trump push New Delhi towards buying Venezuelan oil, which he now sees as American oil, instead of Russian? Experts dub this scenario as unlikely in the near future, stating that much needs to be sorted out in the Latin American nation before the question of oil sales to any country can be talked about. The Venezuelan oil industry is still to find its feet. Statistics released by the US Energy Information Administration show that since US sanctions were imposed in 2019, the Latin American nation has produced a total of 1.14 million bpd in November this year — half of what it used to produce in the late 1990s and early 2000s.
Currently, Venezuela accounts for just 1% of global oil output, and despite Trump’s promise that “large US oil companies would “go in, spend billions of dollars, fix the badly broken infrastructure… and start making money for the country,” diplomats and energy experts believe this will take time. Former Indian ambassador to Venezuela, R Vishwanathan, believes that these factors and the relatively little oil that New Delhi was importing from Caracas prior to the sanctions made it unlikely that Venezuelan oil could become India’s new oil import overnight.
“In 2013-14, India was importing $10 billion worth of oil from Venezuela, which accounted for 7-8% of our total oil imports from the country. But due to the sanctions, this has stopped. We have some investment by ONGC in their oil fields, but by and large this will not affect India in any major way.” Vishwanathan’s contention is supported by other Indian diplomats to Latin America but it remains to be seen just how New Delhi will engage with the new administration. Venezuela reached out to New Delhi to develop stalled projects in San Cristobal and Carabodo for which diplomatic sources say Maduro had been requesting for a meeting with PM Modi.
In contrast, Rodriguez has been a regular visitor to New Delhi, visiting the country in 2023, 2024, and 2025. So, should US companies manage to develop Venezuelan oil projects and New Delhi build on ties with Caracas, one could see more imports of oil from the country. This is especially important as Venezuelan oil is now under the ambit of the US, ensuring that New Delhi will not be able to ignore this global oil bloc when it considers its energy requirements. Kirill Dmitriev, CEO of the Russia Direct Investment Fund -- the sovereign wealth fund of the Russian Federation, gave an idea of just how influential the US-Venezuelan oil bloc would be on the global energy market.
Writing on X, he said. “Venezuela holds the world’s largest proven oil reserves (20%) — about seven times the US. US sanctions have helped keep output around 700,000 bpd versus a 3 million capacity. US and Venezuelan production would be near 20% of global supply (almost two times that of Saudi Arabia, which is 10%). This is a huge market leverage.” This new oil bloc will be of crucial interest to New Delhi, which has looked for some time – even without American pressure – to diversify its oil import market away from the Russian and Middle Eastern oil market, which have become geopolitically risky in recent times.
US pressure, coupled with the fact that Venezuelan oil actually suits Indian refineries, suggest an outreach from New Delhi may be on the horizon once the new administration settles in. The other point that will be of interest to India is Trump. The US president, who has been fixated with India, may insist that New Delhi buy both US and Venezuelan oil. It will remain to be seen how India responds.
