The United States has indicated to New Delhi that India may soon be permitted to resume purchases of Venezuelan crude oil — a marked change in policy that reflects evolving geopolitical priorities as the South Asian nation sharply reduces its reliance on Russian oil amid sustained U.S. tariff pressure.
The potential reopening of Venezuelan oil supplies to India comes after Washington imposed 25 percent tariffs on countries importing Venezuelan crude under former President Donald Trump’s administration in March 2025. That levy was aimed at deterring support for the Maduro government and reducing revenues that could be used to undermine Western policy objectives.
New sources familiar with the matter told Reuters that as India cuts its Russian oil imports — which stood at around 1.2 million barrels per day in January — Washington is offering Venezuelan supplies as an alternative to help fill the gap. India’s Russian crude imports are projected to drop to about 1 million bpd in February and 800,000 bpd by March, with expectations that they may eventually decline further to between 500,000 and 600,000 bpd.
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The shift signals a pragmatic recalibration by U.S. policymakers. With Russian oil revenues seen as funding Moscow’s military operations, particularly in Ukraine, the Trump administration is encouraging partners like India to diversify away from Russian sources. Venezuela, which Washington now exerts de facto control over following the capture of its president, Nicolás Maduro, on January 3, is being positioned as a politically acceptable alternative despite longstanding sanctions.
Tariff Threats and Trade-offs
India’s move towards cutting Russian crude imports has been framed both in Washington and New Delhi as part of a larger strategic negotiation. Last year, the Trump administration first imposed a 25 percent tariff on Indian goods over its Russian oil purchases, part of a broader 50 percent tariff on Indian exports triggered by what U.S. officials called reciprocal trade practices. That punitive tariff regime significantly raised the cost of Indian products in U.S. markets and strained bilateral trade.
U.S. Treasury Secretary Scott Bessent has more recently hinted that the 25 percent tariff might be eased where India’s purchases from Russia have “collapsed,” suggesting a potential rollback if New Delhi continues to align its energy sourcing with U.S. expectations.
India’s Energy Diversification Strategy
India’s pivot away from Russian oil is not solely a response to tariff pressure. New Delhi has publicly noted that it is diversifying its crude sources to ensure energy security as global markets become more complex. Officials say that imports from the Middle East, Africa, and South America are filling the void left by declining Russian volumes.
State-owned refiners such as Hindustan Petroleum Corp Ltd (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) have either halted or significantly reduced Russian oil purchases. Some of these refiners are exploring Venezuelan grades commercially, although pricing and logistics remain key considerations influencing procurement choices.
Meanwhile, private sector giant Reliance Industries has expressed interest in Venezuelan oil if it becomes available to non-U.S. buyers under compliant terms. The refiner paused Venezuelan imports after U.S. tariffs were applied, but remains open to reengaging if regulatory clarity emerges.
Implications for Global Energy and Trade Relations
If India is permitted to resume Venezuelan oil imports, the development is expected to reshape aspects of global crude markets and U.S.–India relations. It would help New Delhi manage its energy mix without absorbing the full impact of U.S. tariffs while aligning more closely with Western efforts to isolate Russian oil revenues. However, most Venezuelan crude currently being offered under U.S. arrangements has been prioritized for the U.S. market, with Indian refiners reporting limited access and unfavorable pricing relative to other sources.
Beyond direct energy policy, the episode highlights broader tensions in U.S.–India trade relations. Tariffs imposed on Russian oil purchases have affected Indian exports across multiple sectors, raising concerns among Indian industry groups about competitiveness and market access.
At the same time, New Delhi’s willingness to shift away from Russian oil — coupled with a US-facilitated alternative in Venezuelan crude — underscores the weight of Trump’s arm-twisting tactic, even on large economies caught in the Washington–Kremlin faceoff.