Ongoing Venezuelan Crisis Unlikely to Disrupt Oil Supply Chain to India

The ongoing Venezuelan crisis is unlikely to have any significant impact on Indian oil refiners, as India stopped using Venezuelan crude owing to sanctions. Venezuela is only a marginal exporter of crude, and any supply disruption due to the crisis is expected to have minimal impact and is unlikely to meaningfully lift global oil prices, a report by The Economic Times said.

Venezuela produces nearly 900,000 barrels per day of crude, contributing around 1% of global supply. According to data from Kpler, nearly 76%, or about 765,000 barrels per day, of its exports go to China, largely to teapot refiners. Around 17% is exported to the US, with the remaining cargoes sent to Cuba, Spain, and Italy.

Any disruption due to the ongoing US action against Venezuela would primarily affect this group of buyers, ET reported, citing an industry executive. The expert added that the global oil market is currently well supplied and can absorb any shortfall.

As per reports, the risk has largely been factored in by markets after the US ordered a blockade of Venezuelan oil shipments last month.

Reliance Industries Ltd was once a major buyer of Venezuelan crude. However, the Indian private refiner has stopped sourcing Venezuelan crude since sanctions were imposed. Other Indian refiners were only marginal users, the ET report said.

ONGC holds stakes in two Venezuelan oil fields—San Cristobal and Carabobo 1—but has been unable to receive its share of income for several years.

Ongoing Crisis

Venezuelan President Nicolás Maduro, who ruled the country for over 12 years, was captured by US forces on Saturday, effectively ending his tenure. US President Donald Trump later said the US would run Venezuela with a transitional group “until such a time as we can do a safe, proper and judicious transition,” a Reuters report said.

Maduro had long been criticised internationally for authoritarian rule, including jailing political opponents and holding disputed elections. He repeatedly denied US accusations of involvement in drug trafficking and corruption. Trump said on Saturday that Maduro and his wife would now face drug- and weapons-related charges under US law.