Even though crude oil and refined products account for more than 90 per cent of India’s imports from Venezuela, the US action is unlikely to materially impact New Delhi’s hydrocarbons trade as the South American country accounts for less than 1 per cent of its crude oil imports.

Analysts and refiners pointed out that even if Venezuela’s crude oil production is disrupted, the development is not expected to majorly impact global crude oil prices considering it accounts for roughly 1.5 per cent of the global supply, even as it holds the world’s largest proven oil 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, which has vast untapped reserves, could boost oil supply globally and lead to softening of crude oil prices over the medium to long term, which could be a positive for India Inc,” Crisil Ratings said on Tuesday.

India’s direct trade with Venezuela is also insignificant, accounting for less than 0.25 per cent of its total imports. Crude oil is the primary import from Venezuela, with India sourcing roughly 1 per cent of its crude oil requirements from the South American country. In fact, crude oil and allied products accounted for over 90 per cent of the around Rs 14,000 crore total imports from Venezuela in FY25, it added.

However, S&P Global Energy pointed out that there could be a more discernible impact on the heavy sour crude oil market. 

“Venezuela accounts for 1 per cent of global crude oil production but roughly 9 per cent of the world’s 9 million b/d heavy crude oil production. The US and China are the world’s largest markets for heavy crude oil. Global heavy crude/ heavy residual feedstock markets are currently narrowly balanced. Higher supply would be bearish for heavy sour crude differentials and high-sulfur fuel oil (HSFO) cracks. Lower supply would be modestly bullish,” it added.

Oil prices

Last week, Jim Burkhard, Vice President and Global Head of Crude Oil Research at S&P Global Energy, also pointed out that the recent developments in Venezuela do little to alter the fact that the global oil market is facing a surplus at the start of 2026. For now, prevailing oil market fundamentals remain largely unchanged.

To be sure, Crisil Ratings stressed that the price of Brent crude oil has remained almost stable over the past few days, hovering a tad above $60 per barrel.

The US Energy Information Administration (EIA) data suggests a point to a similar trend. On a monthly average basis, the price of Brent crude oil declined from a high of $79 per barrel in January 2025 to a low of $63 in December, which was the lowest monthly average price since early 2021. The annual average price was $69 a barrel, the lowest since 2020, even when adjusting for inflation.

In 2025, Venezuela produced an average of 826,000 barrels per day (b/d) of crude oil, excluding imported diluent that is blended into domestic production. Crude oil exports, including blended diluent, averaged 750,000 b/d. China was the largest buyer of Venezuelan crude, typically importing 500,000 b/d or more including transshipments from third countries, S&P Global Energy said.

“Whether Venezuela crude oil production grows after years of neglect is a question that will be answered over months and years, and only with significant levels of investment. For now, prevailing oil market fundamentals remain largely unchanged, Burkhard said.

Mineral development

Rubix Data Sciences pointed out that the Venezuelan Government in November 2025 conveyed its interest in attracting greater Indian investment and technical collaboration in mineral exploration and processing, signalling a potential in the bilateral investment agenda.

Venezuela holds substantial reserves of nickel, iron ore, bauxite, coal and gold, and is increasingly prioritising lithium, nickel and rare earth elements as strategic resources. 

“For India, deeper investment partnerships in these areas could support long-term supply security for minerals essential to batteries, electric vehicles and clean-energy technologies,” the risk management services provider added.

Published on January 14, 2026