Key Points:
- India imports nearly 30% of its oil from Russia, making a full switch costly and complex.
- Venezuelan crude is heavier, more expensive, and harder for many Indian refineries to process.
- Experts say longer transport, higher freight, and operational challenges limit India’s ability to pivot quickly.
NEW DELHI: India is exploring fresh possibilities in its global energy strategy following US President Donald Trump’s announcement of a trade deal that could reshape New Delhi’s oil sourcing.
The proposal, which envisions India gradually pivoting away from Russian crude toward oil supplies from the United States and Venezuela, reflects a broader push to diversify energy partnerships amid shifting geopolitical and market realities.
Announcing the agreement earlier this week, Trump said Indian Prime Minister Narendra Modi had committed to reducing purchases of Russian oil and increasing imports from the US and Venezuela.
In return, Washington sharply reduced trade tariffs on Indian goods from 50 percent to 18 percent, offering a significant boost to Indian exporters.
According to Al Jazeera, half of the earlier tariffs had been imposed as a response to India’s continued imports of Russian crude, which the White House argues indirectly fund Moscow’s war in Ukraine.
India, however, has not publicly confirmed a complete shift away from Russian oil, and analysts say such a transition would be complex. The Kremlin has also indicated it has received no formal communication from New Delhi on halting Russian purchases. Even so, India’s recent actions suggest a gradual recalibration rather than an abrupt break.
For the United States, the idea of India buying Venezuelan oil has strategic appeal. Since early January, after US forces abducted Venezuelan President Nicolas Maduro, Washington has effectively taken control of Venezuela’s oil sector and its cash flows.
Venezuela also holds the world’s largest proven oil reserves—about 303 billion barrels—making it an attractive long-term supplier on paper.
India’s dependence on Russian oil grew sharply after the Ukraine war began in 2022, when Western sanctions pushed Russian crude into Asian markets at steep discounts.
From supplying just 2.5 percent of India’s oil before the war, Russia now accounts for roughly 27–30 percent of imports, or around 1.1 million barrels per day, according to industry estimates. These discounted barrels have helped Indian refiners maintain strong margins and keep domestic fuel prices stable.
Under sustained US pressure, India has already begun trimming Russian imports. Several major refiners, including Hindustan Petroleum Corporation Ltd, Mangalore Refinery and Petrochemicals Ltd, and HPCL-Mittal Energy Ltd, have halted new purchases following US sanctions on major Russian oil companies.
Others, such as Indian Oil Corporation, Bharat Petroleum Corporation, and Reliance Industries, are expected to follow after fulfilling existing contracts.
A complete halt, however, would be costly. Indian officials have repeatedly stressed that sudden disruptions could raise global oil prices and fuel domestic inflation.
Analysts warn that replacing discounted Russian crude with higher-priced alternatives from the US or Venezuela would increase raw material costs and potentially pass higher prices on to consumers.
Structural factors also complicate a full switch. One of India’s largest private refiners, Nayara Energy, is majority-owned by Russia’s Rosneft and relies almost entirely on Russian crude.
Its Gujarat refinery, with a capacity of 400,000 barrels per day, represents a significant portion of India’s refining ecosystem. While Nayara plans maintenance shutdowns in April, its longer-term future remains uncertain amid sanctions.
Venezuelan oil, while abundant, presents its own challenges. The country is located roughly twice as far from India as Russia and far farther than Middle Eastern suppliers, raising freight and insurance costs.
Venezuelan crude is also heavier and higher in sulphur, requiring complex refineries that only a handful of Indian plants possess. Analysts estimate that, without deep discounts, Venezuelan oil could cost India $6–8 more per barrel than Russian supplies, potentially adding $9–11bn annually to India’s import bill.
Still, India has experience with Venezuelan oil. In 2019, it imported $7.2bn worth before US sanctions halted the trade. Some Indian energy officials remain stationed in Venezuela, and refiners have expressed openness to resuming imports if pricing and logistics make sense.
At the same time, New Delhi is broadening its sourcing base. Middle Eastern OPEC nations now account for over half of India’s oil imports, while purchases from the US surged by 92 percent between April and November 2025.
India is sourcing oil from nearly 40 countries, underscoring its focus on diversification rather than dependence on any single supplier. Experts say Venezuela’s ability to become a major supplier again will depend on political stability, regulatory reforms, and higher production capacity—changes that will take time.
In the meantime, India appears set to pursue a balanced, flexible approach, weighing economics, energy security, and geopolitics as it navigates an evolving global oil landscape.
