US Approves Venezuelan Oil Purchases for India to Reduce Russian Crude Dependence
The United States has communicated to India that it can soon resume purchases of Venezuelan oil as part of a strategic effort to reduce India's reliance on Russian crude, according to a Reuters report. This development follows India's earlier pledge to slash Russian oil imports after Washington imposed higher tariffs linked to those purchases.
Strategic Shift in Energy Ties
This move represents a broader US initiative to redirect India's oil imports away from Russia while reshaping energy cooperation between the two nations. Sources cited by Reuters indicate that India is on track to cut Russian crude imports by several hundred thousand barrels per day in the coming months, marking a significant shift in its energy procurement strategy.
Diplomatic Engagement with Venezuela
The US decision to pitch Venezuelan oil to India coincides with enhanced diplomatic engagement between New Delhi and Caracas. Venezuela's interim president, Delcy Rodríguez, announced on Friday that she had agreed with India on energy cooperation during a telephone conversation with Prime Minister Narendra Modi. This discussion occurred just a day after Venezuela opened its hydrocarbons sector to private companies.
Prime Minister Modi echoed this sentiment in a post on X, stating they "agreed to further deepen and expand our bilateral partnership in all areas, with a shared vision of taking India‑Venezuela relations to new heights in the years ahead." Venezuela, home to the world's largest proven oil reserves, has recently reformed laws to open the sector to private investment, a major departure from decades of state control aimed at attracting foreign capital and revitalizing its struggling oil industry.
Historical Context of US Sanctions
In March 2025, former President Donald Trump imposed 25% tariffs on countries purchasing Venezuelan oil, including India, as part of his administration's intensified campaign against Venezuelan President Nicolas Maduro. Following the capture of Maduro by US forces on January 3, Washington began directing the Caracas government and announced plans to control Venezuela's oil industry indefinitely.
India's Declining Russian Oil Imports
India emerged as a major buyer of Russian oil after Russia's invasion of Ukraine in 2022, which triggered Western sanctions and pushed prices lower. However, increasing US pressure and rising trade costs have compelled India to diversify its crude supply sources. Oil Minister Hardeep Singh Puri confirmed last week that India is expanding its sources as Russian imports decline.
Two sources revealed that India is preparing to reduce Russian oil imports to below one million barrels per day soon. Imports were approximately 1.2 million barrels per day in January and are projected to fall to about 1 million barrels per day in February and around 800,000 barrels per day in March. Another source suggested imports could eventually decline to about 500,000–600,000 barrels per day, potentially aiding India in securing a trade deal with the United States.
Impact of US Tariffs and Operational Challenges
US tariffs on Indian goods escalated to 50% in August after Washington added an extra 25% levy over purchases of Russian oil. Operational difficulties created by Western sanctions have also prompted Indian refiners to increase imports from alternative suppliers.
Trade data indicates that India's Russian oil imports dropped to their lowest level in two years in December, boosting OPEC's share of Indian imports to an 11-month high. Refiners have ramped up purchases from Middle Eastern, African, and South American producers to compensate for reduced Russian supplies.
Refiners Adjusting to New Realities
Several refiners have already severed ties with Russian crude. State-run entities such as Hindustan Petroleum and Mangalore Refinery and Petrochemicals, along with private refiner HPCL-Mittal Energy, have ceased buying Russian oil. Other state refiners, including Indian Oil Corp and Bharat Petroleum Corp, have slowed their purchases, as officials disclosed at the India Energy Week conference this week.
Conversely, a private operator of the world's largest refining complex plans to purchase up to 150,000 barrels per day of Russian oil starting in February, according to a company source.
Broader Geopolitical Implications
The effort to supply Venezuelan crude to India aligns with Washington's objective of curtailing Russian oil revenues that are funding the war in Ukraine. Reuters sources did not specify whether the Venezuelan oil would be sold through trading houses like Vitol or Trafigura or directly by Venezuela's state oil company PDVSA.
This strategic pivot underscores the evolving dynamics in global energy markets and India's proactive steps to secure diverse and stable oil supplies amidst geopolitical tensions and economic pressures.
