US President Donald Trump has announced that India is set to shift its crude oil procurement from Iran to Venezuela. , Trump claimed that a deal has already been finalized between the two nations. According to the President, the concept of the agreement is in place, and he suggested that China could also engage in similar deals with Venezuela. As of now, the Government of India has not issued an official statement regarding these claims or the specifics of any new energy agreement.
Diplomatic Engagement and Recent Developments
The announcement follows a significant diplomatic interaction on January 30, when Prime Minister Narendra Modi held a telephonic conversation with Venezuela's Executive Vice President Delcy Rodriguez. During the call, both leaders discussed strengthening bilateral ties and expanding cooperation across various sectors. PM Modi shared on social media platform X that both nations are committed to a shared vision of elevating their partnership. Analysts suggest that this high-level engagement marks a potential pivot in India's energy strategy, aimed at diversifying its crude oil sources amid global geopolitical shifts.
Historical Context of Sanctions and Trade Barriers
India's energy trade with Venezuela has been heavily influenced by US foreign policy. In 2019, the US imposed stringent economic sanctions on Venezuela, including secondary sanctions that targeted third-party entities dealing with the Venezuelan oil sector. This led to a complete halt in Indian imports from Venezuela, which previously accounted for approximately 6% of India's total oil requirements. Although Venezuela holds the world's largest proven oil reserves, its contribution to global supply has been constrained by these sanctions and internal economic challenges.
Reliance Industries and the Pursuit of US Licenses
According to reports by Reuters, Reliance Industries, which operates the world's largest refining complex in Gujarat, has initiated talks with the US State and Treasury Departments to secure licenses for importing Venezuelan crude. Reliance has historically been a major buyer of Venezuelan heavy oil, which is well-suited for its complex refineries. In early 2025, the company imported an average of 63,000 barrels per day from Venezuela before US enforcement tightened in May 2025. The company has indicated that it would consider resuming purchases if permitted under US regulations for non-US buyers.
Economic Implications and Market Analysis
Market analysts observe that India's move to re-engage with Venezuela comes at a time when Western nations are pressuring New Delhi to reduce its reliance on Russian oil. Venezuela offers a strategic alternative for heavy crude, which is essential for Indian refiners to optimize their output. Trump also noted that Venezuela would provide 3 to 5 crore barrels of oil to the US, valued at approximately ₹25,000 crore at current market prices. Experts believe that a stable supply from Venezuela could help mitigate volatility in global energy prices and provide India with greater benefit from in its energy procurement strategy.
Conclusion and Future Outlook
The potential resumption of large-scale oil trade between India and Venezuela remains contingent on the clarity of US sanctions and the formalization of bilateral agreements, while while President Trump's statements suggest a finalized deal, the operational details and the impact on India's existing energy ties with other nations, including Iran and Russia, remain to be seen. The global energy market continues to monitor these developments closely, as they represent a significant realignment of energy flows between South Asia and the Americas.