In a move that has raised eyebrows in energy and policy circles, Reliance Industries is set to purchase Venezuelan crude oil through the United States, despite it being more expensive than supplies from the Middle East. Strategic affairs expert Brahma Chellaney has highlighted this development, suggesting the transaction functions primarily as a political signal to the Trump administration.
The Costly Deal: A Political Calculus?
In a detailed post on social media platform X, Brahma Chellaney, Professor Emeritus at the Centre for Policy Research (CPR), pointed out the financial anomaly. Reliance, India's oil refining giant, will procure Venezuelan crude not directly from the South American nation but from the United States. Once shipping costs are factored in, this Venezuelan crude will actually cost Reliance slightly more than comparable Middle Eastern supplies.
"In other words, the oil purchases function primarily as a political signal to the Trump administration," Chellaney stated in his post dated around 11 January 2026. This analysis follows the recent US military action in Venezuela, which included large-scale strikes and the arrest of President Nicolas Maduro.
Unlocking Seized Oil and Payment Mechanisms
Chellaney elaborated on the source of this oil. Following the military intervention, the US is unlocking nearly 30-50 million barrels of seized Venezuelan crude oil from tankers and storage facilities in Caracas. However, this oil will be sold at full market value for its specific grade, with no discounts offered to global buyers. US President Donald Trump confirmed the oil would be sold at prevailing market rates.
The payment mechanism for this deal is also unconventional. According to Chellaney, Reliance will not pay the US Treasury directly nor purchase US bonds. Instead, the proceeds from the sale will be deposited into US-controlled accounts at globally recognised banks. The expert cited reports suggesting the Trump-led administration aims to route these funds through offshore accounts, potentially allowing the executive branch greater flexibility in managing the money without congressional oversight—an arrangement critics have labelled a potential slush fund.
Persistent Risks and Broader Implications
Despite Washington preparing to issue sanctions waivers for buyers of this seized oil, Chellaney warned that significant legal risks for foreign buyers remain. The expert's comments underscore the complex interplay between global energy markets and geopolitics.
The backdrop to this deal is the US declaration that it will effectively run Venezuela until a safe transition to democracy is secured. President Trump stated this objective publicly after the attack that captured Maduro.
Brahma Chellaney, a veteran with over three decades of experience in international security, holds a PhD from Jawaharlal Nehru University and has served as an advisor to India's National Security Council. His insights point to a scenario where corporate decisions are being shaped by high-stakes international politics, even when they involve a higher cost for the company.
