Venezuela has started sending much larger oil shipments to India, marking a big shift in trade after the easing of US sanctions. The country utilised its first supertankers since restrictions were relaxed, increasing crude exports to India as refiners seek to diversify away from Russian supplies for discounted heavy oil.

Venezuela is now exporting oil to India on a much bigger scale. Super-sized tankers carrying up to 2 million barrels of crude are heading to Indian ports. This follows a Caracas-Washington supply deal that reopened oil flows and allowed Venezuela to expand exports again.

According to Reuters, trading houses and buyers have booked the first very large crude carriers (VLCCs) to export Venezuelan oil since the Caracas-Washington deal. This move is expected to increase shipments to India. VLCCs are among the largest ships used in the global oil trade. They can carry twice as much oil as Suezmax tankers and almost four times more than Aframax tankers. Their large size helps reduce freight costs and make deliveries faster.

At least three VLCCs chartered by Vitol and Trafigura — Nissos Kea, Nissos Kythnos and Arzanah — have been given March loading slots at the Jose terminal. The Jose terminal is operated by Venezuela’s state oil company PDVSA. All three tankers are bound for India, Reuters reported, citing sources. Another supertanker, Olympic Lion, is also signalling Venezuela as its destination.

The use of these larger cargoes is expected to reduce transportation costs and speed up deliveries starting next month. Reuters said this could help clear the millions of barrels currently sitting in Venezuelan storage.

For Indian refiners, this development comes at an important time. Before US sanctions were imposed in 2019, India was the third-largest buyer of Venezuelan crude. Sanctions reduced supplies sharply. Now, under a new licensing framework introduced by Washington, restrictions have been eased, and trade is increasing again.

US oil major Chevron recently sold its first Venezuelan crude cargo to Reliance Industries since December 2023. The shipment was of Boscan heavy crude and marks the first such sale in nearly six years. Reliance has also bought a 2-million-barrel cargo from Vitol and is exploring direct purchases from PDVSA, Reuters reported.

Trading houses have also sold Venezuelan heavy crude to Indian Oil Corp, Bharat Petroleum Corp and HPCL Mittal Energy. India is looking to diversify its crude oil sources and reduce its dependence on Russian supplies.

Indian refiners are especially interested in Venezuela’s discounted Merey heavy crude. However, traders have noted that price conditions in global markets — particularly backwardation — have narrowed profit margins. Even so, larger cargo sizes could reduce freight pressure and improve the overall economics of these shipments.

Earlier this year, most Venezuelan crude exports were transported in medium-sized tankers to US refineries or Caribbean storage hubs. The move to VLCCs represents an upgrade in logistics and shipping strategy.

Venezuela’s oil exports rose to about 800,000 barrels per day in January after sanctions relief, compared to roughly 500,000 barrels per day in December. However, the quick rise in output has left millions of barrels unsold in storage. Increased purchases by Indian refiners could help absorb these volumes and support Venezuela’s export recovery.