Foreign News
India’s Venezuela Bet Goes Beyond Oil
Venezuela is re-emerging as a country of interest for India, and oil is only part of the story.
With the world’s largest proven crude oil reserves, Venezuela offers an immediate opportunity for India’s energy security. Its larger importance, however, lies in the potential to diversify energy and mineral supplies while expanding India’s engagement with Latin America and the wider Global South.
India is the world’s third-largest crude oil importer and its energy demand will continue to rise even as renewable energy expands. Hydrocarbons will remain important to economic growth for years, making diversification of supplies increasingly necessary.
Venezuelan crude fits that requirement. Its heavy grades once formed a significant part of India’s oil imports, particularly for refiners equipped to process them. Reliance Industries was among the major Indian buyers before US sanctions disrupted the trade.
“Venezuela has been for over a decade, a decade and a half, a very important supplier of crude oil to India. Despite the distance and freight costs, the crude has been competitively priced. Refineries on India’s west coast, particularly Reliance, have been able to process this crude efficiently and earn strong margins,” says former Indian ambassador to Venezuela Deepak Bhojwani.
India was once importing Venezuelan crude worth roughly $10-15 billion annually, he says. Imports have since resumed.
“Now imports have begun again. It remains an important source because India needs to diversify its energy supplies,” Bhojwani says.
That diversification has assumed greater importance as Russia became a major supplier of Indian crude after 2022, while West Asia remains central to India’s energy basket. The objective is not to replace one supplier with another, but to reduce exposure to disruptions in any one geography.
Prof. Dattesh D. Prabhu-Parulekar of SIAS, Goa University, sees Venezuela in that context.
“At a time of stressed energy markets and pyrrhic dependency on the Persian Gulf, the de-sanctioned Venezuelan crude supplies, albeit under US chaperoning, constitute a much-vaunted lifeline to shore up New Delhi’s energy security and consequent macroeconomic stability.”
The relationship also has an upstream dimension. ONGC Videsh and other Indian interests invested in Venezuelan oilfields before sanctions complicated operations.
Indian companies have stakes in projects including San Cristóbal and Carabobo, with more than $1 billion invested in Venezuelan energy assets, according to Bhojwani. Some of that investment remains tied up by Venezuela’s economic and political turmoil.
“There are outstanding dividend payments owed to Indian companies. If Venezuela’s economy stabilises, India could not only recover these dues but also expand participation in exploration and production,” Bhojwani says.
That gives India a potential opportunity beyond buying crude: participation in overseas production and a greater role for Indian companies if Venezuela’s economy and investment climate improve.
The longer-term proposition may lie in Venezuela’s mineral wealth.
India’s expansion of electric vehicles, renewable energy, electronics, semiconductors and defence manufacturing is increasing demand for critical minerals. Venezuela has deposits of tantalum, nickel, copper, gold, iron ore, aluminium and bauxite. It also has potential rare-earth resources, although those remain largely unexplored.
Tantalum is used in electronics, aerospace, defence systems and medical equipment. Nickel and copper are important for batteries, electrification and power infrastructure.
“Venezuela also has significant mineral resources, gold, iron ore, aluminium, bauxite and others. These could become attractive opportunities if the economy stabilises and foreign investment is allowed under reasonable conditions,” Bhojwani says.
The caveat is important. Venezuela is not a substitute for the major lithium, cobalt or graphite producers India is already cultivating. Its mining industry has been weakened by sanctions, underinvestment, poor infrastructure, environmental concerns and regulatory uncertainty.
Venezuelan minerals are therefore a medium- to long-term opportunity, not an immediate answer to India’s critical-mineral requirements.
The attraction is diversification. India is building mineral partnerships across countries such as Chile, Peru and Bolivia. A more stable Venezuela could eventually become another source, reducing dependence on a limited number of producers.
India’s engagement with Latin America has expanded considerably, with stronger ties with Brazil, Argentina, Chile, Peru and the Caribbean. Venezuela remained an outlier because of US sanctions, domestic instability and its dependence on Chinese economic and energy ties.
That may now be changing.
“While New Delhi has assiduously cultivated deepening strategic equities across Atlantic, Southern Cone and Pacific Latin American countries, Venezuela somehow remained an enduring outlier,” Prabhu-Parulekar says. “With the Modi government proactively engaging Guyana, Suriname and Caribbean nations, Venezuela comes out from the cold and becomes mainstreamed in India’s strategic calculus.”
The relationship also offers opportunities beyond resources. Dr Aparaajita Pandey points to pharmaceuticals, agriculture, information technology and infrastructure, while Prabhu-Parulekar sees scope for Indian exports in agriculture, engineering and pharmaceuticals, as well as technical training, digital services and capacity building.
Recent humanitarian assistance has added another dimension. India’s disaster-relief response following Venezuela’s earthquake, including military medical teams, modular hospital systems and emergency supplies, helped build goodwill in Caracas.
But the larger calculation is economic.
Venezuela is unlikely to become a major pillar of India’s energy or mineral security anytime soon. Its political and economic recovery remains uncertain, while US sanctions continue to constrain what Indian companies can do.
That does not make the relationship unimportant. It makes diversification its central logic.
For India, Venezuela is not about replacing Russian crude or reducing dependence on West Asia overnight. It is about creating another option: another source of energy, another potential mineral supplier, another destination for Indian investment and another foothold in Latin America.
Oil may bring Venezuela back into India’s calculations. The real test is whether the relationship can be built to last beyond oil.