US-Venezuela Conflict: Crude Shock Worries Grow Worldwide, But India Looks Insulated -- Here's Why

(MENAFN- Live Mint) US President Donald Trump has sent shockwaves around the world by launching airstrikes on Venezuela and capturing its president on charges of narco-terrorism and drug trafficking. With Venezuela being the country with the most oil reserves in the world, the situation demands a glance at how India will be affected by this US action in the South American nation.

The economic think-tank Global Trade Research Initiative (GTRI) believes that the impact on the Indian economy from the US-Venezuela conflict will be negligible.

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"India faces negligible impact, as trade with Venezuela has collapsed under sanctions, with crude imports down 81.3 per cent in FY2025 and overall bilateral trade remaining marginal," GTRI founder Ajay Srivastava was quoted as saying by PTI.

India-Venezuela trade history

In the 2000s and 2010s, India bought vast amounts of crude oil from Venezuela, more than 4 hundred thousand barrels every day at the peak of this trade relationship. But since the US sanctions on the country in 2019, those trade volumes have gone down sharply, as India cut oil imports and scaled back commercial activity in the country in order to avoid secondary US sanctions, Srivastava said.

India's total imports from Venezuela was $364.5 million in FY2025. Of this, $255.3 million was for crude oil, which is 81.3 per cent less than $1.4 billion in crude imports in fiscal year 2024.

In terms of export, the amount was only $95,3 million, of which there were pharmaceuticals worth $41.4 million.

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"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," PTI quoted Srivastava as saying.

Venezuela holds about 18 per cent of the world's oil reserves, more than Saudi Arabia (around 16 per cent), Russia (about 5-6 per cent), or the United States (around 4 per cent).

India can actually gain from US control on Venezuelan oil: Report

A US-led takeover of Venezuela's oil sector could have a positive impact on India, as per industry sources and analysts PTI spoke to.

This US move could potentially unlock around $1 billion for India in long-pending dues. Moreover, crude production in Venezuelan oil fields India has a stake in could be revived under US leadership.

India's ONGC Videsh Ltd (OVL) has a 40 per cent stake in San Cristobal oilfield in the eastern part of the country. However, US sanctions have blocked its access to crucial technology, services, and equipment, thus stranding otherwise commercially viable reserves.

Venezuela has not paid OVL $536 million in dividends up to 2014, as well as a similar amount for the subsequent period of time in which the country has refused to give permission for audits, thus freezing the settlements of India's claims.

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Once sanctions are eased, OVL can move rigs and other equipment from places, such as its parent ONGC's oil fields in Gujarat, to San Cristobal to revive output that has plummeted to 5,000-10,000 barrels per day, officials in the know of the matter said.

The onshore field can produce 80,000-1,00,000 bpd with more wells and better equipment, they said, adding that San Cristobal needs rigs similar to those operating in Gujarat, and Oil and Natural Gas Corporation (ONGC) owns many such rigs.

With PTI inputs

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