Crisil Ratings stated on Tuesday that recent political and military events in Venezuela will probably not affect global crude oil prices in the short term. The rating agency also said Indian companies face minimal risk from the situation.
Why Venezuela's Troubles Won't Move Oil Markets
Crisil explained that Venezuela contributes only about 1.5 percent to the world's crude oil supply. This small share means the country lacks the power to significantly influence international prices. Even if conditions worsen and disrupt Venezuelan oil production, the impact on global markets would remain limited.
The assessment follows uncertainty in the oil-rich Latin American nation. In early January, a US military operation led to the capture of Venezuelan President Nicolas Maduro on drug charges. Despite holding massive proven crude reserves, Venezuela's current output plays a modest role globally.
Steady Prices and India's Limited Exposure
Crude prices have shown stability recently. Brent crude continues to trade just above $60 per barrel. Crisil noted that developments in Venezuela are not expected to materially affect India's trade position or the credit quality of Indian firms.
India's direct trade exposure to Venezuela is quite limited. Imports from the South American country make up less than 0.25 percent of India's total imports. Of these, crude oil constitutes over 90 percent. The value of these imports stood at roughly Rs 14,000 crore during the 2025 financial year.
Venezuela supplies approximately 1 percent of India's overall crude oil requirement. India imports nearly 85 percent of its crude needs and stays sensitive to global price movements. However, Crisil believes the current Venezuela situation is unlikely to sway oil prices in the near future.
Potential Long-Term Effects and Trade Details
Crisil highlighted a possible longer-term impact. If investments begin flowing into Venezuela's oil sector, it could change the outlook. The country possesses vast untapped reserves.
"While we do not anticipate any material near-term impact of the Venezuela situation on crude oil prices, investments for increasing crude oil production in Venezuela could boost oil supply globally," Crisil said. "This might lead to softening of crude oil prices over the medium to long term, which could be a positive for India Inc."
India's exports to Venezuela are also small. They totaled below Rs 2,000 crore in fiscal 2025. This figure represents less than 0.1 percent of India's total exports.
These shipments span several sectors:
- Pharmaceuticals (around Rs 900 crore)
- Ceramics
- Textiles
- Two-wheelers
Pharma exports account for less than 0.5 percent of India's total pharmaceutical exports. Other sectors recorded exports ranging between Rs 80 crore and Rs 120 crore each.
Credit Profiles and Monitoring
Crisil does not foresee any material impact on the credit profiles of Indian companies dealing with Venezuelan clients. The limited scale of trade reduces the risk. However, the agency added that it will continue to monitor developments closely.
Meanwhile, the United States has indicated active engagement with Venezuela's new leadership. President Donald Trump recently stated that Washington was working "along really well" with Caracas. He highlighted ongoing oil shipments to the US.
