NEW DELHI: Following the announcement of a bilateral trade deal between India and the US, industry analysts said India could replace Russian crude oil with imports from Venezuela. They pointed out that discounts on Russian crude have narrowed sharply, while Venezuelan crude, which is heavy and sour, is cheaper and attractive for Indian refineries that can process such grades.
The trade deal was announced late on Tuesday by US President Donald Trump and Prime Minister Narendra Modi. As part of the agreement, tariffs on Indian goods exported to the US will be reduced from 50% to 18%.
President Trump said both countries aim to expand bilateral trade to $500 billion. He also stated that India has agreed to stop buying Russian oil and instead purchase much larger volumes from the US, and possibly from Venezuela.
Trump said India committed to “BUY AMERICAN” at a much higher level, including purchases of over $500 billion worth of US energy, technology, coal, agriculture, and other products. Prime Minister Narendra Modi said that Made in India products will now face a reduced tariff of 18%.
Analysts said India has enough options to replace Russian crude without major disruption. Russian oil accounted for less than 2% of India’s crude imports before FY2023, and the financial impact of replacing it would be limited.
“For the Indian refining sector, there are ample avenues including the US, to purchase crude as Russian crude accounted for less than 2% of Indian crude imports prior to FY2023. The discounts on Russian crude oil were marginal prior to the US announcing sanctions on some Russian crude suppliers in October 2025, and ICRA estimates that replacement of Russian crude with market priced crude would lead to an increase in the import bill of the country by less than 2%. Additionally Venezuelan crudes are heavy and sour and therefore cheaper and would be of interest to Indian refiners, many of whom can process these types of crudes,” said Prashant Vashist, Senior Vice President and Co-Group Head, Corporate Ratings.
India currently imports nearly 88% of its crude oil requirements from more than 30 countries. Russian crude became the largest source after the Russia–Ukraine war began in 2022. Venezuela, which holds the world’s largest proven oil reserves of about 303 billion barrels, produces around one million barrels of crude per day, accounting for roughly 0.8% of global output.
India was once a major buyer of Venezuelan heavy crude, importing over 400,000 barrels per day at its peak. However, imports stopped in 2020 after US sanctions made trade difficult. Data from Kpler shows that Indian imports of Venezuelan crude were strong between 2013 and 2016, rising from about 400,000 barrels per day to nearly 500,000 barrels per day. Reliance Industries’ Jamnagar refinery was the largest buyer, followed by Nayara Energy’s Vadinar refinery, then known as Essar Oil. New Mangalore Refinery also imported smaller volumes.
Imports declined after 2017, peaked at around 540,000 barrels per day in 2018, and fell to zero by 2021 following tighter US sanctions.
Venezuelan crude is mostly heavy to extra-heavy and can be processed by only a few Indian refineries. These include Reliance Industries’ Jamnagar complex and Nayara Energy’s Vadinar refinery, both designed to handle high-sulphur, heavy crude.
Among state-owned refiners, only limited quantities of Venezuelan crude have been processed in the past, mainly at IOC’s Paradip refinery, MRPL, and HMEL. Most public-sector refineries are not equipped to process these grades in large volumes.
