Indian Refineries Grapple With Heavy Venezuelan Crude Amid Political Uncertainty
Updated (2 articles)
Political Statements and Trade Ambiguity The United States captured President Nicolás Maduro, prompting President Donald Trump to claim New Delhi agreed to buy more U.S. crude, yet the joint statement omitted any reference to Venezuelan supplies [1]. India’s foreign ministry said it remains open to Venezuelan oil but past U.S. sanctions halted purchases after a brief 2023‑24 restart, leaving Venezuela’s share of India’s crude basket at roughly 1‑2 % [1]. The ministry’s spokesperson Randhir Jaiswal noted imports continued until 2019‑20 before sanctions forced a pause [1].
Technical Challenges of Venezuelan Crude Hindustan Petroleum’s S. Bharathan described Venezuelan crude as bottom‑heavy, highly viscous and acidic, requiring 10‑15 % co‑blending with lighter grades to be processable [1]. Bharat Petroleum’s Sanjay Khanna added that the oil contains elevated metal and nitrogen levels, while Caliche’s Amit Priyadarshan warned that high viscosity raises pipe pressure and acid numbers accelerate corrosion [1]. Anandh Mathew emphasized the need for specialized catalysts and plant recalibration, noting that such adjustments cannot be completed overnight and storage capacity is limited [1].
Reliance’s First Large‑Scale Shipment Reliance Industries moved a Very Large Crude Carrier loaded with roughly two million barrels of Venezuelan oil to its Jamnagar complex, which is equipped to handle heavy and extra‑heavy crudes [1]. The shipment demonstrates Reliance’s willingness to test the market despite blending and equipment concerns [1]. Bloomberg reported the cargo arrived in early February 2026, marking the first significant Venezuelan delivery to India in years [1].
Market Share Decline and Production Slump Venezuela’s share of India’s crude imports fell from 10‑13 % in earlier years to about 1‑2 % today, reflecting both sanctions and logistical hurdles [1]. Fitch noted that Venezuela, despite holding 17 % of global reserves, produced only 0.8 % of world crude in November, with output at 0.88 MMbpd in 2024 down from 2.5 MMbpd in 2010 [1]. Reuters confirmed that Indian Oil and Hindustan Petroleum have placed orders for Merey crude for April deliveries, signaling limited but ongoing interest [1].
Potential Savings Countered by Shipping Costs An SBI Research note estimated a $3 billion reduction in India’s fuel bill if a $10‑12‑per‑barrel discount on Venezuelan oil is secured [1]. However, shipping costs from Venezuela are about five times higher than those from the Middle East, eroding much of the projected savings [1]. Analysts argue that the discount must be deep enough to offset logistics before Indian refiners consider larger volumes [1].
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Timeline
2010 – Venezuela’s crude output peaks at 2.5 million bpd, a level that later collapses amid economic and political turmoil [1].
2013 – India purchases a record $13 billion of Venezuelan oil, accounting for a sizable share of its crude basket [2].
2019‑2020 – India halts Venezuelan oil imports after U.S. sanctions target state‑owned firms and vessels, reducing Venezuela’s share in India’s crude mix to roughly 1‑2 % [1].
2023‑2024 – India briefly resumes Venezuelan oil purchases, importing modest volumes before renewed sanctions again curb trade [1].
2024 – Venezuelan production slips to 0.88 MMbpd, just 0.8 % of global output, despite holding 17 % of world reserves [1].
FY 2025 (through Nov 2025) – India imports $255.3 million of Venezuelan oil, representing only 0.3 % of its total oil imports that year [2].
Early 2026 (date of U.S. strike) – The United States captures President Nicolás Maduro and declares it will “control the sale of Venezuelan oil indefinitely,” signalling a hardening of sanctions for non‑U.S. buyers [2].
Jan 9, 2026 – Reliance Industries says it will consider buying Venezuelan crude “if access for non‑U.S. buyers is clarified and purchases are conducted in a compliant manner,” awaiting guidance on participation [2].
Jan 9, 2026 – U.S. Energy Secretary Chris Wright asserts Washington’s “indefinite control” over Caracas oil sales following the strike [2].
Feb 19, 2026 – Indian refiners express skepticism; S. Bharathan of Hindustan Petroleum warns the oil is “bottom‑heavy with high viscosity and acid number,” requiring careful handling [1].
Feb 19, 2026 – Sanjay Khanna of Bharat Petroleum adds the crude contains “high metal and nitrogen, needing 10‑15 % co‑blending with lighter crude to be processable” [1].
Feb 19, 2026 – Amit Priyadarshan of Caliche notes that higher viscosity “builds pressure in pipes and vessels,” while Anandh Mathew says “specialized catalysts are needed and recalibrating plants cannot be done overnight” [1].
Feb 19, 2026 – Reliance moves a 2‑million‑barrel Venezuelan cargo to its Jamnagar complex, which can handle heavy and extra‑heavy crude [1].
Feb 19, 2026 – Foreign Ministry spokesperson Randhir Jaiswal states India imported Venezuelan oil until 2019‑20, resumed in 2023‑24, and now the share has fallen to about 1‑2 % of its crude basket [1].
Feb 19, 2026 – Fitch notes Venezuela’s reserve heft versus its output, producing only 0.8 % of world crude in Nov 2024 despite holding 17 % of global reserves [1].
Feb 19, 2026 – SBI Research projects a $3 billion fuel‑bill reduction for India if it secures a $10‑12 per‑barrel discount on Venezuelan oil, even after accounting for shipping costs five times higher than Middle‑East routes [1].
Feb 19, 2026 – Indian Oil and Hindustan Petroleum place orders for Merey crude slated for delivery in April 2026, indicating tentative market re‑engagement [1].