“At that discount, the choice becomes economically agnostic,” SBI noted, meaning Indian refiners would neither gain nor lose purely on logistics—but could still save on the overall import bill.
Isn’t Venezuela much farther away?
Yes, and that’s the catch. SBI points out that Venezuela is five times farther than the Middle East for India, and roughly twice the distance of Russia. That longer haul raises freight, time and insurance costs, pushing up the landed price. The savings only materialise if Venezuelan crude is priced low enough to neutralise those disadvantages.
Can Indian refineries handle Venezuelan crude?
Mostly, yes. But not without constraints. Venezuelan crude is heavy, which means it requires refineries with complex processing capabilities and blending with other grades may involve technological and operational costs. SBI emphasises that India’s strong refining base gives it flexibility—but the economics depend on how easily refineries can absorb different crude blends.
What did SBI’s model show?
Using a ‘brute force scenario’ that preserved historical trends in India’s import basket, SBI modelled a full shift from Russian crude to Venezuelan heavy crude. Under favourable discount conditions, the result: Annual savings of about $3 billion on India’s fuel import bill.
What could change the equation?
Geopolitics. SBI cautions that if hostilities in Ukraine ease, the deep discounts currently enjoyed on Russian crude could narrow—reducing Venezuela’s relative appeal. Still, the report stresses that a $10–12 per barrel discount would be enough to keep Venezuelan crude competitive, even if Russian oil becomes less discounted.
So, what’s the real takeaway?
India’s crude strategy is becoming more price-driven and flexible. Rather than betting on a single supplier, SBI sees a future where India’s import mix constantly shifts—blending Russian, Venezuelan, Middle Eastern and other crudes based on discounts, logistics and refinery economics. Venezuela, long seen as a geopolitical outlier, is now firmly back in the conversation: not for politics, but for price.