Following Washington's clear support of India's efforts to diversify its energy supply, US Secretary of State Marco Rubio has confirmed that Venezuela's interim president Delcy Rodriguez will travel to India for oil talks next week.
In May, Venezuela surpassed Saudi Arabia and the US to become India's third-largest supplier of crude oil, according to Kpler. The only countries ahead are the UAE and Russia. Separately, according to Kpler data quoted by Bloomberg, India is currently the world's biggest customer of Venezuelan crude, surpassing both China and the US.
Delivered to Indian ports, Venezuelan crude is now substantially less expensive than Russian oil.However, India's reliance on Russian oil has not significantly altered despite this reversal. The market was never the true bottleneck. It was the gate to the refinery.
Why Venezuelan oil appears appealing now
One of the most crucial petroleum shipping lanes in the world, the Strait of Hormuz, was disrupted by the confrontation between the US, Israel, and Iran. Russian oil became more expensive as tensions increased.
On February 27, Urals crude delivered to India was trading around $12 below Brent; by mid-March, it had risen rapidly and surpassed Brent pricing. The premium reached a record high of $6 over Brent on March 19. Put simply, Russian oil, which had previously offered India a discount, now costs more than benchmark crude.The expenses and margins incurred by dealers, middlemen, and shipping networks overcoming Western sanctions account for the approximately $25 discrepancy between Russia's domestic export price and what reaches Indian ports.
Venezuela has emerged as an odd replacement.
The price of Venezuelan crude is currently $5–8 less than Brent. However, JP Morgan has highlighted something that is not evident from the price alone. No matter how inexpensive it is, Venezuela cannot replace Russia on a large scale. Supply is not the limit. Refinement capacity is the limit.What changed in favour of Venezuela?
According to Kpler data reported by Bloomberg, India was importing roughly 343,000 barrels of Venezuelan crude per day in March 2026. As a result, India became the largest consumer of Venezuelan oil, surpassing both China and the US. According to Kpler data, that number increased to almost 417,000 barrels per day in May.
Important purchasers include businesses like Indian Oil Corporation, Hindustan Petroleum, and Reliance Industries. According to shipping records and PDVSA papers seen by Reuters, Venezuela's national oil giant PDVSA exported 1.23 million barrels of petroleum per day in April 2026, the most since 2018. By April, India has consumed more than six million barrels of Venezuelan crude since the beginning of 2026.

Additionally, the prices were reasonable. According to reports, Reliance purchased Venezuelan oil from dealer Vitol for delivery in April at a price that was roughly $6.50–7 less than Brent. Chinese customers were being offered the same crude at a price that was roughly $5 less than Brent. In March, shipments to India surged more than four times, surpassing even the US as a destination.
Washington's February 13 General Licence, which enabled Reliance to purchase directly from PDVSA without using trading-house middlemen and significantly improved the economics of each cargo, was a crucial structural enabler.
India is unable to use Venezuelan oil extensively.
At this point, the narrative no longer revolves around cost. The majority of the fuels India purchases are not like Venezuelan crude. It contains thick carbon molecules known as asphaltenes and is heavy and sour.In India, only a few refineries are able to adequately process it. These include HPCL-Mittal's Bathinda refinery, Indian Oil Corporation's Paradip refinery, Bharat Petroleum, and Reliance's Jamnagar complex. The majority of refineries in India are not designed to handle this type of oil. Therefore, even if Venezuela produces more, India won't be able to take it all.
Additionally, JP Morgan has observed that Venezuelan volumes cannot completely replace Russian petroleum, even once sanctions have been lifted. India continues to rely significantly on Russian oil, particularly through unofficial trade routes.
Over the past few years, Indian refiners have developed procedures around Russian supply lines, which are already well-established. Russian oil continues to enter India through a number of unapproved middlemen despite price adjustments.

Without significant modifications, a far larger number of Indian refineries could process Russian Urals crude. For this reason, India swiftly increased imports to almost 40% of its total crude intake when Russian oil became affordable in 2022. This resulted in a system that was based on compatibility rather than merely price.
Additionally, transporting Venezuelan oil is not easy.
It is difficult to deliver Venezuelan oil to India, even when refineries can manage it.
How difficult it can be is demonstrated by a recent shipment. Nearly a million barrels of Boscan crude were on board the tanker Ottoman Sincerity when it reached the port of Sikka. Before arriving in India, the oil had been moved between ships close to Aruba.Venezuelan oil frequently uses this type of ship-to-ship transfer due to the country's few and antiquated ports. Additionally, there are operational and financial hazards. Because oil quality varies and delays are common, shipping companies are often reluctant. Additionally, PDVSA frequently requires upfront payment, which puts customers at greater risk and requires significant financial commitments.
Rodriguez's visit is also likely to bring to light a historical India-Venezuela file: ONGC Videsh has over $500 million in dividends that have been trapped in Venezuela since 2014 due to its ownership of the San Cristobal project. That overhang will need to be addressed in any extended energy cooperation between Venezuela and India.

Only if Washington keeps the door open will the discount math be effective. The February interim US-India trade agreement, which reduced tariffs on Indian imports from 25% to 18% and eliminated the punitive tax, effectively dropped Trump's threat of a 25% secondary penalty against purchasers of Venezuelan oil. However, there are conditions attached to that exception. The deadline for the larger US-India trade agreement is July 24; if it expires, Indian exporters would return to high tariffs, and the political cover for Venezuelan purchases will once again be reduced.
According to Kpler data reported by Bloomberg, India is anticipated to purchase the most Venezuelan oil in six years,based on Kpler data that Bloomberg cited. According to US Energy Secretary Chris Wright, Venezuela might boost production by 30–40% by 2026, adding an additional 300,000–400,000 barrels per day. However, given years of decline and underinvestment in Venezuela's oil industry, that estimate seems dubious.