From Indiatimes · Smriti Jain · · 3m
Trump admin pushes India to buy Venezuelan oil
US wants India to diversify from Russia by buying Venezuelan oil, but refining limits cap imports.
In brief
US wants India to diversify from Russia by buying Venezuelan oil, but refining limits cap imports. India can realistically buy 400,000, 550,000 barrels per day of Venezuelan crude, but Russia remains its largest oil supplier. Originally reported by Indiatimes.
US pushes India to reduce Russian oil reliance
The Trump administration wants India to buy more crude oil from Venezuela to diversify away from Russian energy sources.
Russia remains India's top oil supplier
Russia has gained a substantial share of India's crude oil imports after Indian refiners stepped up purchases of discounted Russian barrels.
India's refining capacity key for Venezuelan oil
Reliance's Jamnagar complex can process heavy Venezuelan grades that many refineries cannot easily handle.
Venezuelan crude is difficult to refine
Venezuelan crude oil has high viscosity, high sulphur content, and large residue yield that require sophisticated refining equipment.
Quality consistency issues with Venezuelan crude
Venezuelan crude varies in water content, up to 5%, which adds operational challenges for buyers.
Kpler data on Indian oil imports
India imported 4.71 million barrels per day of crude in August and 5.33 million barrels per day in September.
Venezuela's share in Indian imports
Venezuela's share was 7.4% at the August peak, 3.7% in September and 5.7% in October.
Realistic import capacity for India
Praveen Rai estimates India can absorb around 400,00:550,000 barrels per day of Venezuelan crude on a sustained basis.
Reliance as primary buyer
Reliance Industries' Jamnagar complex would remain the principal buyer given its ability to process heavy-sour crude at scale.
Competition from Gulf countries
Gulf countries, particularly Iraq, pose a competitive obstacle to Venezuelan crude for Indian refiners.
US Gulf Coast competition
US Gulf Coast refineries are well suited to Venezuelan crude and much closer to loading ports.
Venezuela production constraints
Venezuela's production and export availability will limit how much crude it can supply to India.
Economic feasibility of Venezuelan oil
Venezuelan crude makes economic sense for complex refiners but has narrower margins than Russian oil.
Discount on Venezuelan crude
Venezuelan crude landed at 66 dollars per barrel, a 24 dollar per barrel discount to the Indian Crude Basket.
Freight costs impact discount
Venezuelan crude faces high freight costs, leaving only $2-4/bbl of discount before insurance and processing.
Realistic import levels for India
India can realistically buy 400,000, 550,000 barrels per day of Venezuelan crude, but Russia remains its largest supplier.
The short version
India can realistically buy 400,000, 550,000 barrels per day of Venezuelan crude, but Russia remains its largest oil supplier.
