Following two years of uncertainty surrounding India's oil trade due to conflicts in West Asia, the US' takeover of Venezuelan oil could potentially be a boon for India's import-heavy energy sector if New Delhi plays its cards right, multiple experts told The Quint.
Following the US' capture of Venezuelan leader Nicolás Maduro and his wife on Saturday, 3 January, President Donald Trump said Washington would "take control" of the country's oil industry, and US companies would infuse billions of dollars to revive its infrastructure.
The impact of this announcement was felt in India's Dalal Street, where stocks of Reliance Industries Limited (RIL) rose by 1 percent during early trading on Monday, 5 January, to reach a 52-week high. Similarly, the state-run ONGC (Oil and Natural Gas Corporation) surged two percent. The two conglomerates are expected to be the biggest beneficiaries of the US' takeover of Venezuelan oil due to their partnerships in the country.
However, the long-term benefits that could accrue for Indian companies depend on a number of factors. The Quint analyses the real extent to which Washington's "takeover" of Caracas will impact the Indian economy.
US Control of Venezuelan Oil: Boon for India's Import-Heavy Energy Sector?
1. Will Trump Let Non-US Companies Make Inroads?
To start with, the events in Venezuela have come at an opportune moment for India. US threats to increase tariffs on Indian products unless New Delhi reduces its oil dependence on Russia have been a sore point in ties over the last few months.
Data from the Union Commerce Ministry in December last year showed that India had reduced its import of Russian oil from $5.8 billion in October 2024 to $3.55 billion in October 2025, thus indicating attempts by New Delhi to diversify its oil trade.
At this time, the entry of Venezuela, which used to be one of India's top oil exporters between 2013 and 2019, into the global oil market is a welcome change. But there are multiple parameters that need to go New Delhi's way for consistent gains to accrue.
"It's too early to say anything yet because the US' policy on Venezuela's governance is still indeterminate," Deepak Bhojwani, former Indian Ambassador to Venezuela, tells The Quint.
"Though President Trump has said they will exploit Venezuelan oil, we cannot be certain what role non-US companies may be called upon to play in exploration and related activities," he adds.
India's import of Venezuelan oil had fallen sharply in financial year 2020-21 following US sanctions on the latter in 2019. Commerce Ministry data shows that India's oil trade with Caracas reached a low of $0.64 billion in 2020 from over $6 billion the previous year. In 2013, oil trade between the two countries had reached a high of $13 billion—comprising 10 percent of India's crude basket at the time.
Bhojwani says that if US sanctions on Venezuelan oil are lifted, which should be the case, Indian companies are likely to benefit. However, there is a caveat to this scenario.
"Possible benefits to India will depend upon the price at which the oil is offered, which again will depend upon who will be allowed to sell because the US may not give Venezuelan oil companies a free hand. Trump may decide to first allow US-based companies, that operated earlier in Venezuela, to recover what they lost and only then compensate others."
Deepak Bhojwani, former Indian Ambassador to VenezuelaFurther, there is also a question of whether long-pending dividends from Venezuela will reach India. After trade was curtailed between the two countries, the dues pending from Caracas to New Delhi had hit a brick wall.
For instance, global investment firm Jefferies stated in a report that India's ONGC had not been paid $500 million in long-pending dividends from its Venezuelan upstream project in the country. ONGC Videsh, which is the conglomerate's foreign arm, holds a 40 percent stake in Venezuela's San Cristobal onshore oilfield.
With stakes from all other Indian oil companies that trade with Venezuela combined, experts suggest that $1 billion could enter India's kitty in the medium to long term.
Indian economist Soumya Bhowmick tells The Quint that at a broad geoeconomic level, what could benefit India is greater stability in Venezuela’s energy market, which would make payments, contracts, shipping, and insurance "predictable".
"That could help unlock long-pending receivables and dividends for Indian companies and give India incremental diversification in trade with Venezuela," he says.
He adds, however, that if control over the oil sector remains politically contested or legally uncertain, contractual and financial risks will persist and gains will remain limited.
Sanjeev Ahluwalia, Distinguished Fellow at the Chintan Research Foundation, agrees, but adds that optimism over dividends reaching India should be bottled until such a time that the results of Washington's "restructuring" attempts in Caracas come to light.
"In the long term, if the US manages a more permanent presence in Venezuela, then the outstanding dues to Indian oil companies could be monetised at better terms. However, the US has a patchy record at restoring stability and order in any country they 'take over'. So expectations should be tempered with past experience."
Sanjeev Ahluwalia to The QuintExpand2. Nature of Venezuelan Oil an Impediment for India
Any attempts by India to increase its oil intake from Caracas will be met with yet another hiccup: the very nature of Venezuelan oil.
The country produces heavy and extra-heavy crude oil, which a bulk of India's refineries cannot process. Heavy crudes are far more difficult to process than lighter oil grades as they are thicker, more acidic, and require complex refineries to make them suitable for domestic oil needs.
As of today, India only has five refineries that can process heavy crude, according to experts. These are RIL, Nayara Energy, Indian Oil's Paradip refinery, Mangalore Refinery and Petrochemicals (MRPL), and the Hindustan Petroleum Corporation (HPCL)-Mittal Energy joint venture. India's ONGC has a stake in the last two refineries.
"Venezuelan crude is not new to India's refineries," energy markets expert Lydia Powell tells The Quint. "But only modern private industries can process this variant of oil. So for the refineries with a high complexity index, it will be a benefit."
High complexity index, or Nelson Complexity Index (NCI), refers to a scale which measures the ability of a refinery to break down heavy oil. A 'high complexity index oil' refers to a crude which is difficult to refine owing to its heaviness, high sulphur content, and overall low quality. Such oil requires sophisticated refineries to break it down and turn it into high-quality products, such as petrol, diesel, petrochemicals, et al.
NCI scales vary between 1 to more than 20 to gauge a refinery's sophistication. Just to take an example, RIL's Jamnagar facility has an NCI score of 21.1, as per its website, making it highly competent in breaking down heavy oil. On the other hand, BPCL's Chembur refinery has an NCI score of 5.6, making it unsuitable to process crudes like the Venezuelan variant.
"Despite the heaviness of Venezuelan oil, the crude market will be benefited. There will be an increase in production, which will eventually reduce oil prices or at least limit oil price increases. That in turn will help all oil importers, including India, which has a history of buying a lot of oil from South America."
Lydia PowellExpand3. Can Venezuela 'Replace' Russia As an Oil Importer to India?
As mentioned earlier, Venezuela's entry into the global oil market comes at an opportune moment for India, as it has been looking to diversify its oil imports following 25 percent additional tariffs imposed by the US over New Delhi's high trade levels with Russia amid the Ukraine war.
In the medium to long term, does Venezuela have the ability to "replace" Russia as a favourable oil trader for New Delhi?
While it seems improbable on the face of it, it is notable to mention that Venezuela has the largest oil reserves globally at 303 billion barrels. Hence, there can be no doubt about the country's oil-producing ability. Before US sanctions were imposed in 2019, Caracas ranked among the top 10 highest oil exporters in the world, even competing with the bigwigs of West Asia.
However, its production has come down massively since the early 2010s, when it used to produce 2 million barrels per day. Since 2019, trading partners have gradually reduced their import of Venezuelan oil. Data shows that in November 2025, Caracas produced only 0.9 million barrels per day, most of which were bought by China.
"While Venezuela could become an additional partner to India, any meaningful rebalancing away from Russia would be gradual, shaped by price, reliability, compliance considerations, and the fact that only some Indian facilities are technically suited to Venezuelan energy supplies," Soumya Bhowmick tells The Quint.
One of the key advantages that Russia has over Venezuela is that it produces medium-heavy oil, with its primary export being the Urals blend, which several Indian refineries can process. Venezuela, as already mentioned, produces extra-heavy crude.
Yet another advantage is that Moscow offers significant discounts to New Delhi in terms of oil trade. According to the Center for Research on Energy and Clean Air, Russian discounts to India have increased to $8 per barrel after the US sanctioned Russian oil companies Rosneft and Lukoil in October 2025. This represents a doubling of the discount from around $2-4 before the sanctions came into force.
"When it comes to Russian oil, the main benefit for India is the high discounts. While heavy oil, like the Venezuelan variant, also trades at a discount, we will have to see whether it can match up to the concessions offered by Moscow," Lydia Powell says.
Others, however, suggest that diversification of oil trade is the top priority for India at this time, and efforts in this direction should be undertaken to evade the fallout of US tariffs.
"If sanctions on Venezuelan exports are lifted, India should start importing from the country, provided the price is right since freight costs from Venezuela will be higher than from other producing countries," Deepak Bhojwani says.
(The Quint has reached out to the corporate communication teams of RIL and ONGC. This article will be updated as and when they respond.)
Expand
Will Trump Let Non-US Companies Make Inroads?
To start with, the events in Venezuela have come at an opportune moment for India. US threats to increase tariffs on Indian products unless New Delhi reduces its oil dependence on Russia have been a sore point in ties over the last few months.
Data from the Union Commerce Ministry in December last year showed that India had reduced its import of Russian oil from $5.8 billion in October 2024 to $3.55 billion in October 2025, thus indicating attempts by New Delhi to diversify its oil trade.
At this time, the entry of Venezuela, which used to be one of India's top oil exporters between 2013 and 2019, into the global oil market is a welcome change. But there are multiple parameters that need to go New Delhi's way for consistent gains to accrue.
"It's too early to say anything yet because the US' policy on Venezuela's governance is still indeterminate," Deepak Bhojwani, former Indian Ambassador to Venezuela, tells The Quint.
"Though President Trump has said they will exploit Venezuelan oil, we cannot be certain what role non-US companies may be called upon to play in exploration and related activities," he adds.
India's import of Venezuelan oil had fallen sharply in financial year 2020-21 following US sanctions on the latter in 2019. Commerce Ministry data shows that India's oil trade with Caracas reached a low of $0.64 billion in 2020 from over $6 billion the previous year. In 2013, oil trade between the two countries had reached a high of $13 billion—comprising 10 percent of India's crude basket at the time.
Bhojwani says that if US sanctions on Venezuelan oil are lifted, which should be the case, Indian companies are likely to benefit. However, there is a caveat to this scenario.
"Possible benefits to India will depend upon the price at which the oil is offered, which again will depend upon who will be allowed to sell because the US may not give Venezuelan oil companies a free hand. Trump may decide to first allow US-based companies, that operated earlier in Venezuela, to recover what they lost and only then compensate others."Deepak Bhojwani, former Indian Ambassador to Venezuela
Further, there is also a question of whether long-pending dividends from Venezuela will reach India. After trade was curtailed between the two countries, the dues pending from Caracas to New Delhi had hit a brick wall.
For instance, global investment firm Jefferies stated in a report that India's ONGC had not been paid $500 million in long-pending dividends from its Venezuelan upstream project in the country. ONGC Videsh, which is the conglomerate's foreign arm, holds a 40 percent stake in Venezuela's San Cristobal onshore oilfield.
With stakes from all other Indian oil companies that trade with Venezuela combined, experts suggest that $1 billion could enter India's kitty in the medium to long term.
Indian economist Soumya Bhowmick tells The Quint that at a broad geoeconomic level, what could benefit India is greater stability in Venezuela’s energy market, which would make payments, contracts, shipping, and insurance "predictable".
"That could help unlock long-pending receivables and dividends for Indian companies and give India incremental diversification in trade with Venezuela," he says.
He adds, however, that if control over the oil sector remains politically contested or legally uncertain, contractual and financial risks will persist and gains will remain limited.
Sanjeev Ahluwalia, Distinguished Fellow at the Chintan Research Foundation, agrees, but adds that optimism over dividends reaching India should be bottled until such a time that the results of Washington's "restructuring" attempts in Caracas come to light.
"In the long term, if the US manages a more permanent presence in Venezuela, then the outstanding dues to Indian oil companies could be monetised at better terms. However, the US has a patchy record at restoring stability and order in any country they 'take over'. So expectations should be tempered with past experience."Sanjeev Ahluwalia to The Quint
Nature of Venezuelan Oil an Impediment for India
Any attempts by India to increase its oil intake from Caracas will be met with yet another hiccup: the very nature of Venezuelan oil.
The country produces heavy and extra-heavy crude oil, which a bulk of India's refineries cannot process. Heavy crudes are far more difficult to process than lighter oil grades as they are thicker, more acidic, and require complex refineries to make them suitable for domestic oil needs.
As of today, India only has five refineries that can process heavy crude, according to experts. These are RIL, Nayara Energy, Indian Oil's Paradip refinery, Mangalore Refinery and Petrochemicals (MRPL), and the Hindustan Petroleum Corporation (HPCL)-Mittal Energy joint venture. India's ONGC has a stake in the last two refineries.
"Venezuelan crude is not new to India's refineries," energy markets expert Lydia Powell tells The Quint. "But only modern private industries can process this variant of oil. So for the refineries with a high complexity index, it will be a benefit."
High complexity index, or Nelson Complexity Index (NCI), refers to a scale which measures the ability of a refinery to break down heavy oil. A 'high complexity index oil' refers to a crude which is difficult to refine owing to its heaviness, high sulphur content, and overall low quality. Such oil requires sophisticated refineries to break it down and turn it into high-quality products, such as petrol, diesel, petrochemicals, et al.
NCI scales vary between 1 to more than 20 to gauge a refinery's sophistication. Just to take an example, RIL's Jamnagar facility has an NCI score of 21.1, as per its website, making it highly competent in breaking down heavy oil. On the other hand, BPCL's Chembur refinery has an NCI score of 5.6, making it unsuitable to process crudes like the Venezuelan variant.
"Despite the heaviness of Venezuelan oil, the crude market will be benefited. There will be an increase in production, which will eventually reduce oil prices or at least limit oil price increases. That in turn will help all oil importers, including India, which has a history of buying a lot of oil from South America."Lydia Powell
Can Venezuela 'Replace' Russia As an Oil Importer to India?
As mentioned earlier, Venezuela's entry into the global oil market comes at an opportune moment for India, as it has been looking to diversify its oil imports following 25 percent additional tariffs imposed by the US over New Delhi's high trade levels with Russia amid the Ukraine war.
In the medium to long term, does Venezuela have the ability to "replace" Russia as a favourable oil trader for New Delhi?
While it seems improbable on the face of it, it is notable to mention that Venezuela has the largest oil reserves globally at 303 billion barrels. Hence, there can be no doubt about the country's oil-producing ability. Before US sanctions were imposed in 2019, Caracas ranked among the top 10 highest oil exporters in the world, even competing with the bigwigs of West Asia.
However, its production has come down massively since the early 2010s, when it used to produce 2 million barrels per day. Since 2019, trading partners have gradually reduced their import of Venezuelan oil. Data shows that in November 2025, Caracas produced only 0.9 million barrels per day, most of which were bought by China.
"While Venezuela could become an additional partner to India, any meaningful rebalancing away from Russia would be gradual, shaped by price, reliability, compliance considerations, and the fact that only some Indian facilities are technically suited to Venezuelan energy supplies," Soumya Bhowmick tells The Quint.
One of the key advantages that Russia has over Venezuela is that it produces medium-heavy oil, with its primary export being the Urals blend, which several Indian refineries can process. Venezuela, as already mentioned, produces extra-heavy crude.
Yet another advantage is that Moscow offers significant discounts to New Delhi in terms of oil trade. According to the Center for Research on Energy and Clean Air, Russian discounts to India have increased to $8 per barrel after the US sanctioned Russian oil companies Rosneft and Lukoil in October 2025. This represents a doubling of the discount from around $2-4 before the sanctions came into force.
"When it comes to Russian oil, the main benefit for India is the high discounts. While heavy oil, like the Venezuelan variant, also trades at a discount, we will have to see whether it can match up to the concessions offered by Moscow," Lydia Powell says.
Others, however, suggest that diversification of oil trade is the top priority for India at this time, and efforts in this direction should be undertaken to evade the fallout of US tariffs.
"If sanctions on Venezuelan exports are lifted, India should start importing from the country, provided the price is right since freight costs from Venezuela will be higher than from other producing countries," Deepak Bhojwani says.
(The Quint has reached out to the corporate communication teams of RIL and ONGC. This article will be updated as and when they respond.)