NEW DELHI/Caracas, Jan 4: The US-led takeover of Venezuela’s oil sector could allow India to recover nearly $1 billion in pending dues and revive stalled energy projects, despite current bilateral trade being at a historic low. While the immediate economic impact is expected to be negligible due to a pre-existing collapse in imports under sanctions, a US-backed restructuring offers a potential path for New Delhi to reclaim stranded dividends and diversify its crude sources.
A US military operation on January 4 removed President Nicolas Maduro and placed the country’s vast oil reserves—the world’s largest—under American oversight. Analysts and industry sources say this shift could deliver a direct benefit to India by unlocking long-pending dues and accelerating the revival of crude production from fields operated by ONGC Videsh Ltd (OVL).
India was once a major processor of Venezuelan heavy crude, importing more than 4 lakh barrels per day (bpd) at its peak. However, sweeping US sanctions and rising compliance risks shut down purchases in 2020. OVL, which jointly operates the San Cristobal oilfield in eastern Venezuela, has seen output curtailed as restrictions blocked access to critical technology and equipment.
Venezuela has failed to pay OVL $536 million in dividends due on its 40 per cent stake up to 2014, with a near-equivalent amount pending for the subsequent period. Analysts suggest that under US control, OVL could move rigs and equipment to San Cristobal to revive output, which has plummeted to between 5,000 and 10,000 bpd. The field has the potential to produce up to 100,000 bpd with upgraded infrastructure.
However, the think tank Global Trade Research Initiative (GTRI) noted that any immediate disruption to India’s trade would be marginal. “India faces negligible impact, as trade with Venezuela has collapsed under sanctions, with crude imports down 81.3 per cent in FY2025,” said GTRI Founder Ajay Srivastava. In FY2025, India’s imports from Venezuela totalled just $364.5 million, a sharp drop from the $1.4 billion recorded in FY2024.
Despite the current low volumes, the long-term strategic outlook is significant. “If sanctions are eased, trade flows can resume rapidly,” said Nikhil Dubey, Senior Research Analyst at Kpler. “Venezuelan barrels could again return to Indian refineries.”
Major Indian refiners, including Reliance Industries and Indian Oil Corporation (IOC), possess the technical complexity required to process Venezuelan heavy grades. For India, the world’s third-largest oil importer, renewed exports would offer a strategic alternative to Middle Eastern crude and reduce exposure to Russian oil.
Beyond OVL, Indian firms such as IOC and Oil India Ltd (OIL) hold stakes in the Carabobo-1 Area. While infrastructure decay remains a challenge, a US-directed overhaul—bringing in capital and operational discipline—could lift production significantly within a year, adding supply to global markets and strengthening India’s hand in price negotiations.
Venezuela holds approximately 303 billion barrels of proven oil reserves, surpassing Saudi Arabia. A US-dominated sector would also likely dilute the leverage of China, which currently enjoys priority access to Venezuelan crude through debt-repayment deals.
Maduro arrives in US
Deposed Venezuelan leader Nicolas Maduro arrived in the United States to face criminal charges after being captured in an audacious nighttime military operation that President Donald Trump said would set the US up to “run” the South American country and tap its vast oil reserves to sell to other nations.
Maduro landed late Saturday afternoon at a small airport in New York following the middle-of-the-night operation that extracted him and his wife, Cilia Flores, from their home in a military base in the capital, Caracas – an act that Maduro’s government called “imperialist.” The couple faces US charges of participating in a narco-terrorism conspiracy. (With PTI inputs)
