US-Controlled Venezuelan Oil: Opportunity or Trap for India?
The renewed global focus on Venezuelan oil is not accidental. It follows the capture of President Nicolás Maduro, open statements by US President Donald Trump about the United States “running Venezuela,” and his blunt remark that countries buying Russian oil may soon be buying “Venezuelan American oil.” Together, these events signal a deliberate US strategy to reposition Venezuela’s oil as a geopolitical substitute for Russian crude. For India, which is deeply tied to both Russian and Venezuelan oil, this shift directly affects money, supply security, and strategic autonomy.
India’s stake in Venezuela is not theoretical. Indian public sector companies, led by ONGC Videsh Ltd, invested billions of dollars in Venezuelan oil projects over the last two decades. These investments included equity stakes in heavy crude fields and joint ventures with Venezuela’s state oil firm. When US sanctions tightened and Venezuela’s economy collapsed, oil exports to India stopped and dividend payments froze. As a result, nearly one billion dollars owed to Indian companies has remained stuck for years, not due to lack of oil, but due to sanctions and blocked financial channels.
US control over Venezuela’s oil sector changes this equation. If Washington oversees production, exports, and payment mechanisms, sanctions waivers could allow stalled dividend payments to flow again. For India, this means the possibility of finally recovering long-pending dues without writing them off. It also means Venezuelan oil production could restart with access to technology and capital that sanctions had cut off.
There is also a supply-side attraction. Venezuelan crude is heavy oil, similar to the grades Indian refineries have already processed for years. Technically, Indian refiners can absorb these barrels without major adjustments. At a time when India is trying to diversify beyond Middle Eastern suppliers, Venezuelan oil appears, on the surface, to be a useful option.
The problem lies in the phrase “Venezuelan American oil.” Trump’s wording makes it clear that while the oil may come from Venezuelan soil, control over who buys it, how it is paid for, and under what conditions will rest with the United States. This turns oil into a policy tool rather than a neutral commodity. Access can be granted, limited, or withdrawn depending on broader geopolitical considerations.
This matters because Venezuelan oil is being positioned as a replacement for Russian oil. Since the Ukraine war, India has bought large volumes of discounted Russian crude, significantly reducing its import bill. These purchases have attracted Western criticism but have continued because they serve India’s economic interest. By offering US-approved Venezuelan oil as an alternative, Washington is attempting to reduce India’s reliance on Russia without direct confrontation.
For India, the choice is not straightforward. Russian oil offers price advantages and relative freedom from US operational oversight. Venezuelan oil under US control may help recover stuck investments and diversify supply, but it comes with political strings and uncertainty over long-term reliability.
In practical terms, Venezuela’s oil revival will benefit India only partially. India may recover some or all of its stuck billion dollars. It may regain access to a familiar crude source. But the larger strategic gain accrues to the United States, which would weaken Russia’s oil leverage and gain indirect influence over major importers’ energy choices.
India’s challenge is to engage without becoming dependent. Venezuelan oil can be used as an additional option, not a replacement dictated by external pressure. Treating it as a commercial opportunity while guarding against policy-driven constraints will be critical.
US-controlled Venezuelan oil is neither a clean win nor an outright loss for India. It is a limited opportunity embedded within a larger geopolitical strategy, and India’s benefit will depend on how carefully it navigates the strings attached.
