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• A major disruption in international oil and gas supplies due to the war
• Approximately 10-12 million barrels of crude oil imports from Venezuela
• Venezuelan oil boosts India’s oil refining

Disruption in International Oil and Gas Supply : The raging war in the Middle East has caused major disruptions in international oil and gas supplies, allowing India to import an estimated 10-12 million barrels of crude oil from Venezuela in South America in April. This would be the highest import in six years, according to data from commodity market analysis company Kepler. According to these figures, April will be the first month since May last year, when Venezuelan crude will arrive at Indian ports.

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Although this is a small part of India’s total crude oil imports, these barrels are likely to bring some relief to the country. At the same time, the policy of diversifying sources of crude oil is expected to be strengthened. India meets more than 88 percent of its crude oil needs through imports and processes more than 5 million barrels of crude oil per day. More than 40 percent of these imports come from West Asia through the Strait of Hormuz, where shipping has almost stopped since early March.

India’s oil supply secure

But it is worth noting that the Venezuelan oil stock coming to India must have been purchased before the outbreak of the war in West Asia. This highlights the beneficial benefits of diversifying sources of crude oil supply during a global crisis. India has reduced its dependence on West Asia by importing oil from more than 41 countries in recent years and maintains adequate stocks of crude oil, petrol and diesel.

Kpler manager Sumit Ritolia said Indian oil refiners are already diversifying their sources of crude oil, especially due to the uncertainty in the Strait of Hormuz. The oil influx in April is not a temporary measure but part of a long-term strategy that represents a competitive advantage in the global energy market.

Venezuelan oil boosts India’s oil refining

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

In today’s scenario, oil imports from Venezuela diversify the sources of crude oil and increase the production capacity of Indian refineries. RIL, Naira Energy and some state-owned refineries process Venezuela’s heavy crude oil. Refineries of HPCL-Mittal Energy and Indian Oil also process it to a limited extent. Due to this, India’s crude oil processing capacity is gradually increasing.

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