The renewed geopolitical tensions between the United States and Venezuela are unlikely to pose any immediate risk to global oil supplies or significantly affect India’s oil import bill, according to an economic analysis by Bank of Baroda.
Despite Venezuela holding one of the world’s largest crude oil reserves, its actual contribution to global oil production remains marginal.
In calendar year 2024, Venezuela accounted for only about 1% of global crude oil output, producing roughly 960 thousand barrels per day.
As a result, any disruption linked to current tensions is not expected to materially impact global oil availability, the report said.
However, Venezuela’s strength lies in its reserves, which constitute nearly 19.4% of global proven crude oil reserves.
This has fuelled market speculation that a potential easing of US–Venezuela relations could unlock higher oil supplies in the future. Reflecting these expectations, crude oil prices softened in recent trading sessions.
According to the BoB report authored by economist Dipanwita Mazumdar from a trade perspective, the United States remains the largest destination for Venezuelan crude exports, followed by China and India. For India, bilateral trade with Venezuela remains relatively modest, with total trade standing at around US$1.9 billion, including exports of about US$217 million and imports close to US$1.6 billion.
India’s exports to Venezuela have slowed over recent years, registering a negative compound annual growth rate of 8.8% over the past five years, largely driven by weaker demand for manufactured goods. In contrast, imports from Venezuela picked up in FY25, mainly due to higher crude oil purchases, widening India’s trade deficit with the Latin American nation.
Petroleum crude and related products dominate India’s import basket from Venezuela, accounting for over 90% of total imports.
Notably, Venezuelan oil is imported at a significant discount compared to supplies from other major oil-producing countries, making it a cost-effective source for Indian refiners.