Why Venezuela Has Slipped Out of India’s Crude Oil Import Basket

Not long ago, Venezuela was a significant supplier in India’s crude oil import mix. Today, its presence has dwindled to near insignificance, underscoring how sanctions and geopolitics can decisively override commercial logic in global energy trade.

According to a recent analysis by Rubix Data Science based on India’s Department of Commerce data, Venezuela accounted for 6.7 per cent of India’s crude oil imports in FY2018, placing it among the country’s top six suppliers. Imports peaked the following year at $7.2 billion, reflecting Venezuela’s strategic relevance in India’s energy sourcing at the time.

The trade relationship was commercially sound. Venezuela produces heavy, high-sulphur crude oil — a grade that aligns well with the complex refinery configurations operated by Indian refiners such as Indian Oil Corporation, Hindustan Petroleum Corporation Limited, and Reliance Industries. These refineries are designed to process lower-quality crude efficiently, allowing refiners to extract value despite higher sulphur content.

However, commercial compatibility proved insufficient in the face of escalating geopolitical risk. Venezuela’s share of India’s crude imports fell sharply to 1.1 per cent in FY2021 and dropped to zero in FY2022 and FY2023. The decline was not driven by demand issues or refinery constraints, but by tightening US sanctions targeting Venezuela’s oil sector.

Sanctions increased compliance risks, disrupted payment mechanisms, and raised transaction costs. For Indian refiners operating in a globally diversified crude market, the legal and financial exposure associated with Venezuelan oil began to outweigh the benefits of discounted heavy crude.

A limited reopening emerged in late 2023 after partial easing of US sanctions. Venezuelan oil briefly re-entered India’s import basket, with imports rising to $802 million in FY2024 and $1.41 billion in FY2025. Even then, Venezuela’s market share remained modest at around 1 per cent, ranking only 11th among India’s suppliers — far below its earlier position.

The recovery proved fragile. Data for FY2026 (April–October 2025) shows Venezuela’s share slipping again to just 0.3 per cent. Imports fell to $255 million, and the country dropped to 18th place, indicating that shipments have once again become irregular and opportunistic.

Analysts describe this as a structural break rather than a cyclical dip. While Indian firms such as ONGC Videsh, Indian Oil Corporation, and Oil India continue to hold legacy equity stakes in Venezuelan oil projects, actual trade flows remain hostage to sanctions policy rather than market fundamentals.

As of early 2026, Venezuela’s oil exports continue to face uncertainty, with shipments subject to scrutiny and policy shifts even as Caracas and Washington negotiate possible sanctions relief. Despite holding some of the world’s largest oil reserves and producing crude ideally suited for Indian refineries, Venezuela remains sidelined.

The episode highlights a broader reality of modern energy security: access to oil is shaped as much by geopolitics and compliance risk as by refinery design and pricing. Unless sanctions ease in a sustained and predictable manner, Venezuela is likely to remain a marginal supplier rather than a core component of India’s oil shopping list.