India Restarts Venezuelan Oil Imports: In a significant development, Indian refiners have recommenced the purchase of Venezuelan oil through intermediaries. Reliance Industries is poised to engage with executives from Venezuela’s state-owned firm PDVSA next week, initiating discussions on oil sales following the recent easing of U.S. sanctions on the South American nation. This move signals the revival of trade between Venezuela, an OPEC producer, and India, which was once its second-largest destination for oil exports.
The temporary lifting of sanctions by Washington in October created a window for Venezuelan oil exports, leading to a surge in spot sales of crude and fuel through middlemen and traders, particularly to China. Despite this, Venezuela’s oil output remains volatile, imposing limitations on its export capabilities.
India’s decision to resume importing Venezuelan crude, after a hiatus since 2020, holds strategic significance. Access to Venezuela’s heavy oil could potentially cap import costs for India, a major buyer of Russian oil, and further diversify its sources, reducing dependence on the Middle East.
Reports indicate that three Indian refiners have already secured around 4 million barrels of Venezuelan crude for delivery in February. The transactions were executed at a pricing range of $7.50 to $8 per barrel below dated Brent on a delivered ex-ship basis. Notably, trading house Vitol played a role in these transactions, selling 1.5 million barrels to Indian Oil Corp and 500,000 barrels to HPCL-Mittal Energy (HMEL), a joint venture between Hindustan Petroleum Corp and Mittal Energy Investment.
This move underscores the evolving dynamics in global oil trade, with India strategically navigating its energy-sourcing options amidst geopolitical shifts. The easing of sanctions opens avenues for renewed diplomatic and economic ties between India and Venezuela, impacting the global energy landscape.
