India will buy Venezuelan oil, confirms Oil Minister Hardeep Puri
India is set to purchase Venezuelan oil, as announced by Minister of Petroleum and Natural Gas Hardeep Singh Puri on Friday. This decision comes after the United States lifted sanctions on Venezuela, allowing Indian refiners like Reliance Industries, Indian Oil Corp, and HPCL-Mittal Energy to secure Venezuelan oil cargoes. India last imported Venezuelan crude in 2020.
Refineries capable of processing heavy crude
Puri emphasized that several Indian refineries, including Paradip, can process heavy Venezuelan oil. He stated, "Many of our refineries, including Paradip, (are) capable of using that heavy Venezuelan oil. And we will buy (Venezuelan oil)." As the world's third-largest oil importer and consumer, India imports over 80% of its oil needs from abroad and aims to reduce its crude import bill by enhancing its refining capabilities.
India's refining capacity
India currently refines 50 lakh bpd and is witnessing growth in refining capacity, according to Puri. He added, "...if Venezuelan oil comes to market we welcome it." Puri also mentioned that some Indian money is locked up in Venezuela, referring to India's Oil and Natural Gas Corp, which has over $500 million in pending dividends since 2014 for its stake in Venezuelan projects. India remains open to purchasing oil from any country not under sanctions, the minister added.
Venezuela offered huge discounts during sanctioned period
In October of this year, Washington relaxed sanctions on Venezuela's oil sector, permitting unrestricted oil exports for six months. As an OPEC member with the world's largest proven oil reserves, Venezuela primarily targeted Chinese independent refiners with huge discounts during the sanctions period. Recent reports, however, indicate a shift as the easing sanctions have led to reduced discounts, enticing other buyers beyond Chinese refiners.
Venezuela was India's fifth-largest oil supplier back in 2019
Before US sanctions in 2019, private sector refiners Reliance Industries and Nayara Energy regularly purchased Venezuelan crude. However, once the sanctions were imposed, imports from Venezuela halted. In 2019, Venezuela ranked as India's fifth-largest oil supplier, providing nearly 16 million tonnes of crude, according to trade records. India heavily relies on imports to fulfill more than 85% of its oil needs.
