CHENNAI: Global investment banker and capital markets player Jefferies has flagged Reliance Industries and ONGC as the key Indian companies that could benefit from a potential US-led restructuring of Venezuela’s oil sector, a development that may gradually alter global supply dynamics but is unlikely to disrupt crude prices in the near term. The brokerage notes that while Venezuela holds some of the world’s largest proven oil reserves, years of sanctions, underinvestment and operational challenges have sharply curtailed production, limiting its immediate influence on international markets.
According to Jefferies, any restructuring backed by the United States would likely focus on stabilising governance, easing sanctions in a calibrated manner and attracting fresh capital and technical expertise into Venezuela’s ageing oil infrastructure. However, the firm emphasises that Venezuela’s current output remains a fraction of its historical peak, meaning that additional barrels entering the market in the short term would be modest and insufficient to materially move global crude prices. As a result, near-term oil price trends are expected to remain driven by broader factors such as OPEC+ policy, global demand conditions and geopolitical developments elsewhere.
For Indian companies, the opportunity lies less in an immediate supply shock and more in company-specific advantages that could emerge if Venezuela’s oil sector is gradually revived. Reliance Industries stands out due to the configuration of its Jamnagar refining complex, which is among the most complex in the world and well suited to process heavy and sour crude grades such as those produced in Venezuela. Jefferies believes that a reopening of Venezuelan crude flows under a restructured framework could allow Reliance to access discounted heavy crude once again, improving feedstock economics and supporting refining margins. Historically, Venezuelan crude has traded at a discount to benchmark grades, and even a partial return of such supplies could enhance profitability for complex refiners with the ability to handle challenging grades.
ONGC’s potential gains are more closely tied to its upstream exposure through ONGC Videsh’s investments in Venezuela. Jefferies points out that ONGC has long-standing assets in the country that have been largely stranded due to sanctions and payment constraints. A restructuring that allows smoother operations and financial flows could help unlock pending receivables and dividends that have accumulated over several years. This, in turn, could strengthen ONGC’s cash flows and balance sheet, while also improving the perceived value of its overseas portfolio, which has been weighed down by geopolitical risk and uncertainty.
From a broader market perspective, Jefferies cautions that Venezuela’s long-term impact on oil prices will depend on the pace and scale of investment following any restructuring. Reviving production meaningfully would require sustained capital expenditure, modern technology and a stable operating environment, all of which would take time to materialise. Over the medium term, a gradual increase in Venezuelan output could add incremental supply to the global market, potentially exerting downward pressure on prices if not offset by production discipline elsewhere. Such a scenario could influence refining margins, upstream realisations and valuation assumptions across the energy sector.
For now, Jefferies views the Venezuela narrative as a medium-term strategic theme rather than a near-term catalyst for crude prices. The brokerage underlines that the more immediate implications are stock-specific, with Reliance and ONGC better positioned than peers to benefit if political and regulatory conditions improve. Any re-rating, however, will depend on tangible progress on the ground, clarity on sanctions policy and evidence that Venezuela can sustainably rebuild production. Until then, the situation is expected to remain a slow-moving but potentially meaningful development for select Indian energy companies rather than a game-changer for global oil markets.
