Disruption in International Oil and Gas Supply: Due to the ongoing fierce war in the Middle East, there has been a disruption in international oil and gas supply, due to which India can import about 10-12 million barrels of crude oil from Venezuela in South America in April. According to data from commodity market analytics firm Kpler, this will be the highest in the last six years. The data also shows that April will be the first month after May last year when Venezuelan crude oil will reach Indian ports.

These barrels, however, represent only a small part of India’s total crude oil imports. Nevertheless, these are expected to provide some relief to the country and strengthen its strategy of diversifying its sources of crude oil. India meets more than 88 percent of its needs through imports and processes more than 5 million barrels of crude oil every day. More than 40% of imports come from West Asia through the Strait of Hormuz, where shipping has almost completely stopped since the beginning of March.

Secure oil supply in India

However, it is worth noting that the Venezuelan oil cargo coming to India was probably purchased even before the war in West Asia started. This shows how beneficial it is to diversify the sources of supply of crude oil in times of global crisis. India has been importing oil from more than 41 countries in the last few years, due to which its dependence on West Asia has reduced and the stock of crude oil, petrol and diesel in the country remains sufficient.

Kpler manager Sumit Ritolia says Indian refiners are already diversifying their crude oil sources, especially due to the uncertainties over the Strait of Hormuz. The ships arriving in April are not an immediate measure but part of a long-term strategy that signals a competitive edge in the global energy market.

India’s refining strengthened by Venezuelan oil

Reliance Industries (RIL) was a major Venezuelan buyer in 2019, but imports stopped due to US sanctions. RIL and other Indian refiners resumed imports after restrictions were eased in October 2023. Venezuelan heavy crude oil helps in producing distillates such as diesel and jet fuel, thereby strengthening India’s distillate production capacity.

In today’s environment, oil import from Venezuela diversifies the sourcing of crude oil and also increases the production capacity of Indian refineries. RIL, Nayara Energy and some government refineries process Venezuelan heavy crude. Refineries of HPCL-Mittal Energy and Indian Oil also process it in limited quantities. Due to this, India’s crude oil processing capacity is gradually increasing.