The turmoil in Venezuela will not impact India’s dwindling bilateral trade with the Latin American country, but it may open up the possibility of untapping oil flow to the country if sanctions are eased, experts have said.

India has historically processed a significant volume of Venezuelan crude, which is heavy in nature. Major domestic refiners such as Reliance, Vadinar (Nayara), IOC, HEML and MRPL have the requisite complexity to process the grades and blend efficiently.

India’s imports touched nearly 450,000 barrels per day, according to research analytics firm Kpler, before crashing down to zero following US sanctions and compliance risks. Limited volume briefly re-emerged when restrictions were partially relaxed and select buyers, notably Reliance, were allowed to resume purchases under special authorisation, Nikhil Dubey, senior research analyst, refining and modelling at Kpler, wrote on LinkedIn.

Drawing reference to Panama, another Latin American country, he pointed out that trade flows improved after the removal of general Manuel Noriega in 1990. “Under such circumstances, Venezuelan barrels could again return to Indian refineries,” he wrote.

During the protracted trade negotiation with the US, India is understood to have pleaded with America to partially lift sanctions to purchase Venezuelan oil, as a trade-off against cutting down on Russian oil buy. It did not materialise as yet, even as India was forced to reduce its Russian oil purchase post US sanctions on two of the top Russian producers, Rosneft and Lukoil.

The US invasion of Venezuela comes at a time when India is actively diversifying its crude basket, amidst the Indo-US trade negotiations. “If sanctions on Venezuela are eased, Venezuelan crude could offer additional flexibility to Indian refiners and help ease supply concentration risk,” he noted.

In FY25, India’s total imports from Venezuela were just $364.5 million, of which crude oil accounted for $255.3 million — an 81.3 per cent drop from $1.4 billion in crude imports in FY24. India’s exports to Venezuela were modest at $95.3 million, led by pharmaceuticals worth $41.4 million, think tank GTRI noted.

“Given the low trade volumes, existing sanctions constraints, and the large geographical distance, the current developments in Venezuela are not expected to have any meaningful impact on India’s economy or energy security,” GTRI founder Ajay Srivastava wrote in a note.