A possible US-led takeover or restructuring of Venezuela’s oil sector could bring major financial and strategic benefits for India. Analysts and industry sources told PTI that India could unlock close to USD 1 billion, mainly through the recovery of long-pending dues owed to ONGC Videsh Ltd (OVL). The move could also allow Indian refiners, including Reliance Industries, to restart large-scale imports of Venezuelan crude once US sanctions are eased.

For India, which is the world’s third-largest oil importer, the return of Venezuelan oil would offer an important alternative to Middle Eastern crude. It would help reduce exposure to geopolitical risks, improve price negotiations, and give India greater flexibility in managing its crude oil imports.

Before sanctions were imposed, India was one of the biggest buyers of Venezuelan heavy crude. At its peak, India imported more than 4,00,000 barrels per day from Venezuela. Indian refiners, especially Reliance Industries, had invested heavily in complex refining systems that are specifically designed to process heavy grades of crude oil like those produced in Venezuela. These grades are particularly suitable for making diesel and other high-value fuels.

However, in 2020, sweeping US sanctions on Venezuela forced Indian companies to stop all oil purchases. Rising compliance risks and restrictions on technology, equipment, and financial transactions made it impossible for Indian firms to continue operations. As a result, India’s oil imports from Venezuela fell to zero, and its dependence on Venezuelan crude ended abruptly.

Now, analysts believe the situation could change following the United States’ recent military and political action in Venezuela, during which US forces captured President Nicolas Maduro and placed the country’s oil reserves under American oversight. According to experts, this development could lead to a gradual easing of sanctions on Venezuela’s oil sector.

US President Donald Trump has already stated that as part of the takeover, major US oil companies would return to Venezuela to refurbish and modernise the country’s badly damaged oil infrastructure. Analysts say that while US companies will play a major role, Washington will still need international partners, including Indian firms, because of their experience with heavy crude oil and the markets they provide.

ONGC Videsh jointly operates the San Cristobal oilfield in eastern Venezuela. Although the field is commercially viable, US sanctions imposed in 2020 prevented the company from accessing drilling rigs, oilfield services, advanced technology, and even dividend payments.

Due to these restrictions, Venezuela failed to pay USD 536 million in dividends to ONGC Videsh up to 2014. When combined with dues accumulated after 2014, the total unpaid amount now stands at around USD 1 billion, according to officials.

Once sanctions are eased, OVL is expected to move drilling rigs from its oilfields in Gujarat to the San Cristobal field. This would help revive production, which has currently dropped to just 5,000–10,000 barrels per day. With additional wells and improved equipment, output could rise sharply to around 80,000–1,00,000 barrels per day, analysts said.

Indian companies could also expand their presence in Venezuela. OVL is expected to revive production from the Carabobo-1 oilfield, another major heavy crude project. OVL holds an 11 per cent stake in Carabobo-1, while Indian Oil Corporation (IOC) and Oil India Ltd (OIL) each hold a 3.5 per cent stake.

For Reliance Industries, the largest operator of complex refining capacity in the world, Venezuelan heavy crude is seen as an advantage rather than a challenge. Reliance, along with Nayara Energy, IOC, HPCL-Mittal, and MRPL, can efficiently blend and process heavy crude oil.

These refiners can convert Venezuelan crude into higher-value fuels, giving India more flexibility in its crude basket and reducing dependence on any single supplier, including Russia. This diversification is particularly important at a time when India is navigating global geopolitical changes and ongoing India–US trade discussions.

Analysts believe that a US-led restructuring of Venezuela’s oil sector could allow sanctions to be lifted in stages. This would enable exports to resume through monitored channels and allow Venezuela to clear outstanding payments using oil revenues.

Beyond financial recovery, the development could give India important strategic advantages. ONGC could recover its long-blocked funds, Reliance would gain access to a reliable and suitable crude source, and India would regain an option it lost due to sanctions.

Renewed Venezuelan oil exports would also reduce India’s dependence on Middle Eastern supplies and dilute China’s dominance in Venezuela’s oil exports. This would help protect India from supply disruptions caused by regional conflicts.

“Indian refiners are structurally configured for Venezuelan heavy crude. If production rises and payments normalise, trade can restart almost immediately,” an oil industry executive told PTI.

For India, the story is not about returning to the past, but about restoring a strategic choice that was taken away. With sanctions easing and production restarting, Venezuela could once again become an important part of India’s global oil strategy.