Venezuela Crisis: What It Means for Petrol and Diesel Prices in India

New Delhi: The recent arrest of Venezuelan President Nicolás Maduro by the United States has sparked concerns over global oil markets. Venezuela, home to the world’s largest oil reserves, could see its oil fields come under U.S. control, potentially causing major disruptions in the global economy.

However, experts say that the unfolding crisis is unlikely to have an immediate impact on India’s crude oil supply or fuel prices. According to The Times of India, while geopolitical tensions may affect global markets, India’s imports from Venezuela have been relatively low in recent years.

India-Venezuela Oil Trade
In 2024, Venezuela ranked 18th among India’s crude suppliers, falling to 21st between April and October last year. During this period, India imported slightly over $300 million worth of oil from the South American nation. Government officials note that the situation is evolving, but there is no immediate threat to India’s supply.

Ajay Shrivastava, founder of think tank GTRI, points out that while India was a major buyer of Venezuelan crude in the 2000s and 2010s, U.S. sanctions imposed in 2019 significantly reduced trade. Consequently, India’s imports from Venezuela have been minimal, and business activities were adjusted to comply with these restrictions.

Market Implications
IDFC First Bank Chief Economist Goura Sengupta adds that, even though Venezuela’s oil is largely absent from global supply, the crisis could create market sentiment effects. Emerging market currencies, including the Indian rupee, may see increased volatility. She notes that Indian crude importers could benefit if Venezuelan oil re-enters the market, providing opportunities to diversify sources.

Prashant Vashistha, Senior VP at ICRA Ratings, explains that Venezuela currently contributes only about 1% of global oil production, despite having the largest reserves. Production has fallen 10% between 2014 and 2024, limiting immediate market impact.

Brent crude prices are trading slightly lower, at $60.57 per barrel, according to OilPrice.com. A recent JP Morgan report projects Brent prices could drop to $30 per barrel by FY2027 due to an expected global supply surplus—a scenario that could benefit India, which imports over 85% of its crude oil. Notably, the Indian government reduced petrol and diesel prices by ₹2 per litre ahead of the 2024 general elections.