US offers Venezuelan oil to India to cut Russian crude imports
After Trump’s tariffs, the US urges India to reduce Russian oil imports and resume buying Venezuelan crude amid Ukraine war concerns
The US, which had earlier slapped tariffs on India for buying oil from Venezuela, has now offered New Delhi the opportunity to resume purchases of Venezuelan oil to sharply cut down its oil imports from Russia, the revenue which the Trump administration believes is being used by Moscow to fund its war in Ukraine. The development has been reported by Reuters, quoting sources.
US President Donald Trump had imposed 50 per cent tariffs on India, out of which 25 per cent tariffs were due to New Delhi’s purchase of Russian oil.
The report further stated that India has decided to sharply cut down Russian oil imports following Trump’s tariffs, adding that New Delhi is all set to reduce Russian oil imports by several hundred thousand barrels per month in the next few months.
US control over Venezuelan oil
Since the capture of Venezuelan President Nicolas Maduro by US forces on January 3, the Trump administration has been instructing the Venezuelan government and reportedly plans to run the country’s oil industry for an indefinite period.
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However, the report quoting sources stated that so far there has been no clarity on whether the Venezuelan oil would be marketed by foreign trading houses like Vitol or Trafigura or be sold directly by Venezuela’s state oil company PDVSA.
India diversifying crude oil imports
India’s purchase of Russian oil reportedly witnessed a sharp spike after international sanctions imposed on Moscow over its invasion of Ukraine in 2022 brought down its oil prices.
However, according to the report, Oil Minister Hardeep Singh Puri last week said that India was diversifying its crude oil imports as imports from Russia were decreasing. It further stated that India was preparing to bring down Russian oil imports below one million barrels per day soon.
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The report further stated that the imports are expected to taper off over time to around 500,000-600,000 barrels per day, a move seen as aiding India’s efforts to secure a trade agreement with the United States.
Trade data showed that India’s Russian oil imports dropped to a two-year low in December, while OPEC’s share of India’s crude imports rose to its highest level in 11 months.
Move by Indian refineries
Indian refiners have increasingly sourced oil from the Middle East, Africa and South America to offset the reduction in Russian supplies. State-run Hindustan Petroleum, Mangalore Refinery and Petrochemicals and private refiner HPCL-Mittal Energy Ltd have already halted purchases of Russian oil.
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Reliance Industries, which operates the world’s largest refining complex, is set to buy up to 150,000 barrels per day of Russian crude from February, stated the report, quoting a company source.
Other state refiners, including Indian Oil Corp and Bharat Petroleum Corp, have also slowed their Russian oil purchases, officials said on the sidelines of the India Energy Week conference this week.