Winning Bizness Desk

Mumbai. India has asked its state-run oil companies to consider buying more crude from the United States and Venezuela, according to a Bloomberg report, signalling a potential shift away from Russian supplies after a recent trade deal with Washington. The move follows an announcement by US President Donald Trump, who claimed that India had agreed to stop importing Russian oil as part of the trade understanding. New Delhi has not publicly confirmed this claim but has maintained that diversifying energy sources and safeguarding national energy security remain its top priorities.

Shift after US trade agreement

The reported direction comes in the wake of the India-US trade deal, under which Trump said India would halt purchases of Russian crude. While the government has not directly responded to that assertion, officials have consistently said India is broadening its sourcing strategy.

Key developments include:

• State refiners advised to give preference to US crude in spot tenders
• Similar consideration suggested for Venezuelan crude
• No formal public statement from Petroleum Ministry or PSUs
• Emphasis on energy security over geopolitical alignment

Private deals for Venezuelan crude

Government sources indicate that while US crude can be sourced through regular spot market tenders, Venezuelan oil is likely to be procured through private negotiations with traders. Recently, Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd together bought around 4 million barrels of Venezuelan crude.

After tighter US oversight on the Nicolas Maduro government, global trading houses such as Vitol and Trafigura are marketing Venezuelan oil. Private sector major Reliance Industries has also purchased a Venezuelan cargo for the first time since mid-2025.

Challenges in scaling US imports

Energy experts caution that sharply increasing imports from the US and Venezuela may not be straightforward for Indian refiners. Two main challenges stand out:

• Refining configuration: Most Indian refineries are designed for medium or heavier crude. US crude is typically light and sweet, with lower sulphur content, and may not perfectly suit existing refinery setups.
• Freight and cost: Shipping crude from the US involves longer distances and higher freight rates. Supplies from Kazakhstan and West Africa are geographically closer and often cheaper.

Despite this, Indian refiners are estimated to have the capacity to import about 400,000 barrels per day from the US annually, nearly double last year’s average of 225,000 barrels per day. The final decision will depend on pricing and India’s diplomatic balancing with Russia.

Return of Venezuelan oil

India had stopped buying Venezuelan crude after the US imposed sanctions in 2019, prompting many countries to halt imports. Venezuela, a member of OPEC, holds the world’s largest proven oil reserves but contributes only about 1 percent to global supply.

Sanctions were partially eased during 2023-2024, allowing India to resume purchases.

• In 2024, imports ranged between 63,000 and 100,000 barrels per day.
• By 2025, India’s Venezuelan oil imports were valued at about 1.41 billion dollars.
• In May 2025, the US tightened restrictions again.

Understanding crude oil typesThe nature of crude plays a crucial role in refinery economics.

• Light sweet crude, common in the US, has low sulphur and yields petrol and diesel more easily but is generally costlier.
• Heavy sour crude, sourced from Venezuela and Russia, is thicker and high in sulphur. Indian refineries are well equipped to process this variety, making it economically attractive.

Officials stress that terms such as “consider” reflect diplomatic caution. Rather than issuing explicit orders, the government appears to have given refiners flexibility to recalibrate sourcing without signalling direct interference in global markets.