Ready to import oil from any country not under sanctions

India will buy crude oil from Venezuela as a number of Indian refineries are equipped to process heavy crudes, Petroleum Minister Hardeep Singh Puri said. With the United States (US) easing sanctions on Caracas in October, India’s imports of Venezuelan oil are set to resume after three years. The minister said that as a major international consumer of crude oil, India is willing to buy oil from any country that is not under sanctions.

At least three Indian refiners — Reliance Industries (RIL), Indian Oil Corporation (IOC), and HPCL-Mittal Energy (HMEL) — are understood to have booked Venezuelan oil cargoes, which are expected to land in India over the next couple of months. Bharat Petroleum Corporation (BPCL) is also looking to start imports of oil from the Latin American country.

India — specifically private sector refiners RIL and Nayara Energy (NEL)–was a regular buyer of Venezuelan crude prior to imposition of US sanctions on Caracas in 2019. Following the sanctions, oil imports from Venezuela stopped. According to data from commodity market analytics firm Kpler, India last imported Venezuelan crude in November 2020.

As per India’s official trade data, Venezuela was New Delhi’s fifth-largest supplier of oil in 2019, providing close to 16 million tonnes of crude to Indian refiners. In value terms, India’s 2019 oil imports from Venezuela stood at $5.70 billion.

In October this year, Washington eased sanctions on Venezuela’s oil sector, authorising oil exports without limitation for six months. Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC) has the largest proven oil reserves in the world.

India is the world’s third-largest consumer of crude oil and depends on imports to meet over 85 per cent of its requirement. Given the volatility in the oil markets over the past nearly two years, the government has maintained that India will buy from wherever it can get cheaper oil.

Venezuela has reportedly been offering steep discounts to Chinese independent refiners, who have been its biggest buyers of oil through the sanctions. However, recent reports suggest that the discounts have narrowed considerably in recent weeks due to the easing of sanctions and other buyers now willing to pick up Venezuelan oil. Caracas appears eager to sell its crude in other major markets and is likely offering discounts to willing buyers.