India considers switching from Russian to Venezuelan oil sources

US President Donald Trump Announces Trade Deal with India, Plans to Sell Venezuelan Oil

Indian Prime Minister Narendra Modi has agreed to reduce its reliance on Russian energy in exchange for a trade deal with the US, according to a statement released by US President Donald Trump. As part of the agreement, India will begin purchasing crude oil from Venezuela, which was previously controlled by the country’s president, Nicolas Maduro.

The US has taken control of Venezuela’s oil industry since early January, when Maduro was abducted by US special forces. In return for this move, Trump has reduced trade tariffs on Indian goods from 50% to 18%. The White House maintains that India’s purchase of Russian oil is financing Russian President Vladimir Putin’s war in Ukraine.

However, Indian officials have not publicly confirmed their commitment to ceasing purchases of Russian oil or embracing Venezuelan crude. Kremlin spokesperson Dmitry Peskov stated that Russia had received no indication of this from India.

Switching to Venezuelan oil will be complex due to various factors such as market shocks, costs, geography, and the characteristics of different types of oil. The US has been pressuring India to stop buying Russian oil for months, following the imposition of an oil price cap on Russian crude by the US and European Union in 2022.

India currently sources around 30% of its oil from Russia, with nearly 1.1 million barrels per day being imported. Under Trump’s pressure, this amount has decreased to lower levels. Venezuela has the largest proven oil reserves in the world, estimated at 303 billion barrels, more than five times larger than those of the US.

The deal aims to benefit both countries, but analysts note that it may be operationally messy for India due to the complexities involved in sourcing and refining oil.

Source: Al Jazeera