In early 2026, a sudden US military intervention in Venezuela, culminating in the capture of President Nicolás Maduro, jolted global oil markets and geopolitics. Caracas, home to the world’s largest oil reserves, estimated at around 300 billion barrels, found its fate suddenly in foreign hands.
For India, now the world’s fastest-growing major oil consumer, this crisis opens an unexpected opportunity. India consumed about 5.3 million barrels per day (bpd) of crude in 2023 and relies on imports for roughly 88 per cent of its oil. Indian refiners, from Reliance Industries to state-owned giants, see Venezuela’s heavy oil as a way to diversify supplies and cut costs.
India’s oil chiefs are quietly eyeing Venezuelan fields and shipments even as international criticism mounts. Global experts note that Venezuelan crude is prized for being heavily discounted today, a boon for India’s mega-refineries.
A lead analyst at Kpler, Sumit Ritola, observes that if Venezuelan barrels re-enter world markets, they “are likely to come at a discount, improving feedstock optionality and economics for compatible refiners.” In this complex chessboard, Reliance is positioning itself to capture a slice of Venezuela’s oil riches.
US Military Intervention Shakes Up Venezuela
On January 3, 2026, President Donald Trump announced that US forces had struck Caracas and captured President Maduro. Analysts immediately noted how unprecedented this move was, the biggest US intervention in Latin America since Panama in 1989.
Trump justified the operation under a revived Monroe Doctrine, vowing that American oil firms would pump billions into “refurbishing” Venezuela’s industry, paid for by the country’s own oil. Critics around the world, from China to Iran, condemned the strikes as illegal.
Some Venezuelan allies warned this could destabilise Latin America, while US officials openly spoke of running Venezuela’s oil sector “until a proper and judicious transition” is arranged.
Global investors and economists were quick to react. Jamie Cox of Harris Financial noted that big oil companies’ shares jumped on expectations of the “potential benefits of rebuilding the oil industry in Venezuela.”
Yet others, like RBC’s commodity strategist Helima Croft, cautioned that this would be “an enormous undertaking” and that the US record in nation-building is “not one of unambiguous success.”
Venezuela’s Massive Oil Reserves And Declining Output
Venezuela’s oil wealth is nearly mythic. The country holds an estimated 303 billion barrels of proven oil reserves, far exceeding even Saudi Arabia. These are mostly extra-heavy crude deposits in the Orinoco Belt, a type that Indian refineries can process efficiently.
Yet years of mismanagement and sanctions have hobbled production. By late 2025, Venezuela was pumping only about 0.9 million bpd, down from roughly 2.0 million bpd a decade earlier. Annual exports have similarly collapsed from around 707 million barrels in 2019 to about 352 million barrels by 2025.
Despite plunging output, Venezuelan oil still flows, largely to long-time allies, under sanctions. China remains the dominant customer. About 80 per cent of Venezuela’s exports went to Chinese refiners, roughly 746,000 bpd as of November 2025.
Shipments to the United States, through Chevron’s limited licence, have crept upward, reaching about 150,000 bpd in November. Analysts note that if infrastructure is rebuilt, US firms and licensees could modestly boost output.
Choice Institutional Equities projected that output might rise by around 150,000 bpd in 2026 with existing facilities, a small uptick given the scale of the prize. Experts stress, however, that reviving Venezuela’s oil sector will require heavy investment and stable governance, and that transitions in such economies have proven challenging in practice.
India’s Growing Energy Appetite And Reliance’s Strategy
India’s energy demands are booming. In 2023, India consumed about 5.3 million bpd, and its growth pace now surpasses all countries except China.
With domestic oil production stagnant, India imports nearly 90 per cent of the crude it consumes. That dependency, at a record 88.2 per cent of consumption in FY25, makes India keen to diversify its oil suppliers. Any opening to oil outside the volatile Middle East and contentious Russia is viewed as a prize.
Indian refiners can extract greater economic value from cheap heavy barrels. For example, Reliance’s massive Jamnagar complex, the world’s largest refinery hub, is built to handle highly sulphurous, heavy crudes.
Sumit Ritola notes that Venezuela’s Merey blend, a dense and acidic crude, suits Reliance’s technology and is likely to trade at a healthy discount to lighter grades. Industry reports suggest that Venezuelan heavy crudes typically sell at USD 5 to 8 below Brent, a margin that companies such as Reliance and IOC have capitalised on when flows resumed.
In short, for India’s refiners, the economics of cheap Venezuelan oil are highly attractive amid broader efforts to secure affordable energy.
Reliance’s Refining Edge And Oil Investments
Reliance Industries is especially well-positioned. Its twin refinery complexes in Gujarat can process about 1.4 million bpd combined. That unmatched scale allows Reliance to absorb cheaper, heavy grades like Venezuela’s extra-heavy oil, often referred to as Merey.
Analysts point out that if Venezuelan barrels return to the market, complex plants like Jamnagar would see improved margins. “If Venezuelan barrels re-enter global markets, they are likely to come at a discount, improving feedstock economics for compatible refiners,” says Sumit Ritola.
Kpler’s Nikhil Dubey similarly observes that India’s most complex refineries, including Reliance, IOC’s Vadinar, MRPL, and HPCL’s HMEL, have historically processed high-acid Venezuelan oil, and any return is likely to be at discounted levels.
Reliance also had a long-term supply strategy before US sanctions disrupted it. From 2012 until 2019, Reliance had an agreement to source about 20 per cent of its daily crude requirements from PDVSA, Venezuela’s state oil company.
With Washington hinting that it may again permit Venezuelan sales to non-US buyers, brokerages such as Jefferies believe Reliance could revive such agreements. One analysis argues that Reliance could “secure long-term supplies at lower prices, boosting refining margins and cash flows” if sanctions ease.
This pragmatic focus on profit explains why Reliance executives are closely watching US policy shifts on Venezuelan oil.
Geopolitical Risks And Expert Warnings
The US intervention remains deeply controversial. Many observers believe oil was the true motive behind the strike. Journalists at The Indian Express note that while Washington cited counter-narcotics concerns, a “united tone” among international critics is that oil was the real motive behind the operation.
Venezuela’s government and allies accuse the US of a blatant grab for resources. Even within America, lawmakers questioned the legality of seizing a head of state without a UN mandate. Analysts point out that in modern history, foreign-backed regime change in energy-rich nations rarely proceeds smoothly.
RBC’s Helima Croft warns that rebuilding a damaged oil industry is a mammoth task, and the US track record is mixed. Another strategist, Tina Fordham, compares hopes of a Venezuelan oil bonanza to messy post-authoritarian transitions elsewhere.
From New Delhi’s perspective, this risk cuts both ways. India traditionally champions non-interference, yet its businesses see commercial opportunity. Analysts caution that any US control over Venezuelan infrastructure would be fragile.
Venezuelan officials have denounced Maduro’s capture as “kidnapping” and vowed resistance, even swearing in Vice President Delcy Rodríguez as interim president. Her defiance and threats of reprisals underline how uncertain US control remains. India’s engagement with Venezuela is therefore entangled with significant geopolitical risk.
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India Seizes The Opportunity Amid Sanctions
Despite these risks, Indian firms are pragmatically preparing to benefit. ONGC Videsh, the overseas arm of state-owned ONGC, already co-owns two Venezuelan fields, San Cristóbal and Carabobo-1, holding 40 per cent and 11 per cent stakes respectively.
These assets have been crippled by sanctions, and Venezuela owes ONGC Videsh about USD 536 million in frozen dividends from earlier production.
Analysts note that a US-led deal could allow India to recover these funds and restart stalled projects. Jefferies argues that easing sanctions would enable India to reclaim dues and revive long-dormant investments.
Meanwhile, Indian refiners stand ready to import heavily discounted crude. Companies such as Nayara Energy, BPCL, HPCL, and IOC have also processed Venezuelan oil in the past. With PDVSA weakened and US majors moving in, analysts expect global buyers to look increasingly towards India for extra-heavy barrels.
By mid-2025, Mumbai’s port of Sikka had already received its first Venezuelan cargo in months, and India’s largest refiner had sought US permission to buy more. The calculus is clear. India’s hydrocarbon importers believe they can secure cheap fuel to meet domestic needs, even if it means navigating US pressure.
The Venezuela crisis has placed India in a unique position. With energy demand surging and Western oil policies in flux, Indian companies are moving quickly. Reliance and its peers are banking on Venezuelan oil’s deep discounts and suitability for complex refineries to boost margins.
If sanctions are relaxed, Reliance could revive its earlier strategy of locking in Venezuelan volumes, significantly lowering crude costs.
This hard-nosed approach, focused squarely on extracting value from the Orinoco Basin, reflects how India is balancing strategic non-alignment with commercial interests. India’s oil sector is quietly preparing to capitalise on a geopolitical upheaval, reinforcing the idea that in times of crisis, the fastest movers often emerge as winners.
Images: Google Images
Sources: Finshots, The Guardian, The Indian Express
Find the blogger: Katyayani Joshi
This post is tagged under: India Foreign Policy, Energy Geopolitics, Venezuela Crisis, US Sanctions, Global Oil Politics, Reliance Industries, Indian Business Strategy, Energy Security, South South Cooperation, Global South, Crude Oil Trade, Oil Diplomacy, Geopolitical Risk, Sanctions Politics, India US Relations, Latin America Politics, Strategic Autonomy, Emerging Markets, International Political Economy, Corporate Geopolitics
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