India to Buy Oil from Venezuela Instead of Russia? Inside the US Pitch Amid Tariff Pressure

The idea sounds unusual at first. Venezuela replacing Russia in India’s oil basket? But over the past few days, this possibility has moved from the margins into serious diplomatic conversation.

According to reports that surfaced this week, the United States has quietly suggested that India consider resuming crude oil imports from Venezuela as an alternative to Russian supplies. The timing is not accidental. The proposal comes as Washington weighs steep tariffs, reportedly up to 25%, on certain Indian exports, with Russia-linked energy trade forming part of the broader backdrop.

This is not a formal deal on paper yet. It’s more of a strategic nudge. But the implications are real.

Why the US Is Bringing Venezuela into the Picture

Since the Ukraine war, India has emerged as one of the biggest buyers of discounted Russian crude. At its peak, Russian oil accounted for over 35–40% of India’s total crude imports, jumping from near-zero levels before 2022. For Indian refiners, the math was simple: cheaper barrels, better margins, and manageable logistics.

For Washington, however, those flows have been a constant irritant.

US officials have been signalling that while India is free to make sovereign energy choices, continued dependence on Russian oil complicates trade and geopolitical alignment. The latest pitch encouraging Venezuelan crude purchases appears to be part of a broader effort to reduce Moscow’s oil revenues without directly forcing India’s hand.

Venezuela, interestingly, offers a workaround. US sanctions on Caracas have been partially eased in recent months, allowing some oil exports under monitored frameworks. That has reopened channels that were effectively shut for years.

The Tariff Angle: What’s at Stake for India

The oil discussion is unfolding alongside trade tensions.

The US has reportedly floated the possibility of imposing tariffs of up to 25% on select Indian goods. While official reasons vary, market access, trade imbalances, strategic concerns, and India’s energy ties with Russia have clearly featured in private conversations.

At the same time, American officials have hinted that tariff pressure could ease if India’s Russian crude imports continue to decline.

Data already shows a shift. Russian oil flows to India have softened from their highs, falling from around 1.2 million barrels per day earlier to below 1 million barrels per day recently. Middle Eastern suppliers and African grades have slowly regained share.

The Venezuelan option, then, is being positioned as a face-saving compromise: diversification without a direct political climbdown.

Can Indian Refineries Even Use Venezuelan Oil?

This is where reality intrudes.

Venezuelan crude is typically heavy and high in sulfur. Not all Indian refineries can process it efficiently. Complex refiners like Reliance Industries and Nayara Energy have the capability, but even for them, logistics and consistency matter.

India has imported Venezuelan oil in the past, but volumes were modest and irregular. Restarting flows would require commercial agreements, shipping arrangements, and clarity on payment mechanisms, all under the shadow of evolving US sanctions rules.

Industry executives have also pointed out that Venezuelan supply capacity is not what it used to be. Years of underinvestment mean production is still fragile, despite recent improvements.

In other words, Venezuela could supplement India’s oil mix, but replacing Russian barrels entirely is unrealistic.

India’s Position: Economics First

Officially, New Delhi has stayed measured.

India’s consistent stance has been that energy security is driven by availability, price, and reliability, not geopolitics alone. The government has repeatedly said it will buy oil from wherever it makes economic sense.

That position hasn’t changed.

If Venezuelan crude is competitively priced and logistically viable, refiners may buy it. If not, they won’t regardless of diplomatic messaging. The same logic applies to Russian oil, Middle Eastern grades, or US shale.

Behind closed doors, however, policymakers are clearly weighing the broader trade-offs. Avoiding punitive tariffs while keeping fuel costs under control is a delicate balancing act.

What This Means Going Forward

This story is less about Venezuela and more about leverage.

The US is using trade tools to shape energy flows. India is using its market size to maintain flexibility. Russia, meanwhile, is watching one of its biggest buyers slowly diversify.

Don’t expect a sudden headline saying “India dumps Russian oil.” That’s unlikely. What’s more probable is a gradual rebalancing with fewer Russian barrels, more diversity, and selective experimentation with sources like Venezuela.

For markets, refiners, and policymakers, this is a reminder that oil is never just about energy. It sits at the intersection of economics, diplomacy, and power. And right now, that intersection is getting crowded.