In a posting which astonished regular watchers of global politics, President of the US, Donald Trump, stated that the special forces of the US successfully landed in the Venezuelan capital, Captured the President of Venezuela, Nicolas Maduro, thereby concluding more than a dozen years of rule. Soon, a caretaker government was formed. Later, Trump stated that Venezuela will provide millions of barrels of oil to America and also stated that the oil production in Venezuela will be controlled by America for a few years.
There were quite a few reasons for the strike. Among them are some which are quite prominent. One of them is oil. A year ago, the US threatened nations that had ties with Venezuelan oil with tariffs. Current circumstances have led them to strongly persuade the oil companies in the US to resume production in Venezuela. This comes as a very strategic move for the Indian government.
Why Venezuelan oil is important and the challenge it presents
On paper, it is supposed to be the “greatest oil power in the world.” Venezuela is located on top of one of the world’s largest oil-bearing regions. This land strip is called the Orinco oil belt. Venezuela has proven reserves of 303 billion barrels of oil. This represents 17% of proven worldwide oil reserves.
However, Venezuelan oil is some of the hardest oil in the world to refine. “While some oils flow like water, the Orinoco oils are ultra-heavy and highly sulfuric and metallic. They are so heavy that at ordinary temperatures they barely flow. In some cases, steam injection or expensive light hydrocarbons are required just to pump the oil out of the ground.”
All this is measured by the Nelson Complexity Index. In simplified refineries, indices are in the range of 2-3. In order to process Venezuelan oil, a complexity index of at least 10 is required; that is a category attained by a handful of refineries in the globe.
THE ADVANTAGE OF INDIA
But here comes the part where India is different. It has very little domestic oil supply. Therefore, refineries over the past few decades have been designed to be extremely versatile and advanced. The NCI ratio at Reliance Industries’ Jamnagar refinery is above 21. It is one of the highest ratios worldwide. Other refineries in India are equipped to handle heavy/sour oils.
India has experienced this scenario in the past. Venezuela accounted for around 12% of India’s crude oil imports in 2013. This came to a grinding halt when sanctions were imposed by the United States. Currently, commodity traders are said to be approaching refiners in India for supplies of Venezuelan oil, starting from March.
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Why US may not take it all
On the face of it, the United States should be its best customer. After all, many refineries along the American Gulf Coast were originally designed to handle heavy Latin American oil, and Venezuela is just days away by ship.
However, not all capacity can be utilized by the US. Taking into account the capacity, it was possible to process 1.6 million barrels per day from Venezuela. Given that information, in excess of capacity and in the event that plants are not operating, Venezuela would seek other buyers.
One such country that has been buying Venezuela’s sanctioned oil is China. However, the demand for oil from China has leveled off as there is an increase in electric vehicles. There are very few markets for such oils, and India is among them.
Economics must still get it right
The most significant obstacle is the distance involved. The Venezuelan oil, to reach India, would have to travel 9,800 miles, which would take 40 days, consequently costing as much as $4 a barrel.” It would be feasible only if the oil is less expensive to defray the total costs involved.
This play is not foreign to the Indian government. After the Ukrainian invasion in 2022, when Russian oil was priced lower, it jumped from 2% to over one-third of Indian imports. This was perceived to have saved several billion dollars. According to pressure from the West in 2025, these figures reduced. Perhaps the Venezuelan source can fill the difference―but not on the same terms.
A Washington-based agreement
In contrast to what happened in Russia oil supply, Venezuelan oil export access will be carefully managed by the US. All payment conduits will be monitored for US approval before access is granted. Sanctions are not applicable, but political risks are present. Oil will quickly become a political bargaining chip.
Afterwards, there is a problem in Venezuela. The pipes in Venezuela are corroded. ExxonMobil has even declared it to be “uninvestable” in its current state. Developing a supply base out of reserves is going to take even more of what Trump has not always supplied – stability.
For India, Venezuelan oil is a real but weak chance. Sweets enough discounts and the right politics, and Indian refineries could just get another lucky break. Otherwise, the door could slam shut as abruptly as it opened.
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