Developments in Venezuela are unlikely to have any immediate impact on India’s oil supplies or domestic fuel prices, though they could open up avenues for diversifying crude sources if geopolitical conditions ease and US sanctions are relaxed, experts and government officials said.
US-led sanctions on Venezuela have sharply curtailed the country’s oil exports to global markets, including India. Venezuela was India’s 18th-largest crude oil supplier last year, but slipped to 21st place in the current fiscal so far, with imports during April–October valued at just over $300 million.
With the situation still evolving, government officials said there is no cause for concern at present. “We don’t know how things play out, but there is no immediate impact on our supply,” an official said.
Analysts echoed this assessment, noting that India’s exposure to Venezuelan crude has been limited for several years. “For India, the Venezuelan disturbance is unlikely to have any material economic or energy impact,” said Ajay Srivastava, founder of think tank GTRI. He pointed out that while India was a major buyer of Venezuelan crude in the 2000s and 2010s, bilateral engagement weakened significantly after 2019 due to US sanctions. These restrictions forced India to halt oil imports and scale back commercial activity to avoid secondary sanctions, even as Indian companies such as ONGC Videsh held upstream stakes in the Orinoco belt.
However, economists cautioned that global sentiment could still be affected. Gaura Sengupta, chief economist at IDFC First Bank, said the situation in Venezuela could add to volatility in emerging market currencies, including the rupee, even if direct trade linkages remain minimal. “Though India’s current account deficit has been low this fiscal due to front-loading of exports, this is another significant global event after high US tariffs,” she said.
Sengupta added that there is no visible impact on retail fuel inflation at present, but Indian oil companies should be prepared to take advantage of any future return of Venezuelan crude to global markets. “If and when Venezuelan oil comes back, Indian refiners should use the opportunity to diversify their sourcing,” she said.
Rating agency Icra also expects limited short-term impact on oil markets. “Venezuelan crude has effectively been out of the global market for quite some time due to sanctions, and exports have fallen considerably,” said Prashant Vashisht, senior vice-president at Icra Ratings.
Despite holding the world’s largest proven oil reserves—estimated at around 17% of the global total—Venezuela’s production has been hampered by years of underinvestment and operational challenges. The country was only the 20th-largest crude producer last year, with output declining from a peak of around 2 million barrels per day to about 1 million barrels per day, or roughly 1% of global production. According to Energy Institute data, production fell by about 10% between 2014 and 2024.
Experts said any meaningful revival in Venezuelan oil output would require substantial investment in infrastructure and sustained policy stability, making a rapid return to global markets unlikely in the near term.
