New Delhi: When US President Donald Trump announced a trade agreement with India on Monday, he said the deal would involve New Delhi moving away from Russian oil. He claimed that Prime Minister Narendra Modi had agreed to stop buying Russian crude and instead buy more oil from the United States and from Venezuela, whose oil industry has come under effective US control following the capture of President Nicolás Maduro earlier this year.
In exchange, Trump reduced trade tariffs on Indian goods from an overall 50 percent to 18 percent. Half of the 50 percent tariff had been imposed last year as punishment for India’s Russian oil imports, which the White House said were helping to fund Russian President Vladimir Putin’s war in Ukraine.
Since the announcement, India has not publicly confirmed a halt to Russian oil purchases or the start of Venezuelan imports. Kremlin spokesperson Dmitry Peskov said on Tuesday (February 3) that Russia had received no official indication from India regarding the proposed change.
Analysts say that switching from Russian to Venezuelan oil is far from simple. Factors such as costs, distance, oil quality and market fluctuations all complicate New Delhi’s decisions.
Trump’s push against Russian oil
Trump has been pressing India for months to end purchases of Russian oil. After Russia invaded Ukraine in 2022, the United States and the European Union imposed a price cap on Russian crude to limit Russia’s war financing. India responded by buying large quantities of discounted Russian oil. Before the war, the country sourced only 2.5 percent of its oil from Russia. It now imports roughly 30 percent, making it the second-largest buyer after China.
In 2025, Trump doubled trade tariffs on Indian goods and imposed sanctions on Russia’s top oil companies, threatening secondary sanctions against nations or companies that continued trading with them. Since Maduro’s abduction, the United States has gained effective control of Venezuelan oil sales.
Estimated at 303 billion barrels and over five times the United States, Venezuela holds the largest proven oil reserves across the globe. While US officials see Venezuelan crude as a viable alternative for India, analysts warn it would be operationally complicated.
India’s dependence on Russian oil
India presently imports nearly 1.1 million barrels per day (bpd) of Russian crude (down from 1.21 million bpd in December 2025 and more than 2 million bpd in mid-2025). One barrel yields roughly 73 litres of petrol after refining, along with other products, including jet fuel, plastics and household items.
While India has reduced Russian imports, it has not completely stopped. Indian officials had said they needed to import Russian oil because other suppliers were sending their oil to Europe after the Ukraine war and buying it helped keep energy prices stable and affordable for people in the country.
Major refiners such as the Hindustan Petroleum Corporation (HPCL), the Mangalore Refinery and Petrochemicals (MRPL) and the HPCL-Mittal Energy halted Russian purchases following US sanctions, while the Indian Oil Corporation (IOC), the Bharat Petroleum and the Reliance Industries are expected to follow.
Challenges of halting Russian oil
Stopping Russian oil entirely would be costly and could push up energy prices, analysts warn. Petroleum Minister Hardeep Singh Puri stated that disrupting supplies would have serious global consequences.
Analysts said that halting imports would redirect Russian oil toward China and shadow tanker fleets, increasing global freight rates.
Indian refineries have benefited from discounted Russian crude over the past two years. The observers suggest moving to higher-cost alternatives such as US or Venezuelan oil, would squeeze refinery margins and could result in higher prices for consumers.
Nayara Energy, a private Indian refiner majority-owned by Russia’s Rosneft, depends heavily on Russian crude and will pause refinery operations for maintenance in April. Analysts say it is unlikely that the United States will give special permission to Russian-backed companies, making it unclear if India can fully switch sources.
The Venezuelan alternative
India has imported oil from Venezuela in the past. In 2019, these imports reached about $7.2 billion, making up roughly 7 percent of India’s total oil purchases. Sanctions later stopped these imports, but some Indian officials are still based in Caracas to work on energy and trade cooperation. Refiners say they would consider Venezuelan crude only if it is viable and cost-effective.
Distance and cost are major challenges. Venezuela is roughly twice as far from India as Russia, making freight far more expensive. Venezuelan crude is heavier and more sulfur-rich, requiring specialised refineries. Only a few Indian refineries can process such oil without blending with lighter crudes.
Analysts estimate the switch could raise India’s oil import costs by $6-8 per barrel, potentially increasing the annual import bill by $9-11 billion, which is roughly the size of India’s health budget.
Venezuela also produces barely a million barrels per day, insufficient to replace India’s Russian imports. Political instability, foreign investment laws and debt restructuring will further slow any increase in output.
Diversification efforts
India is exploring multiple sources for oil, with imports now coming from nearly 40 countries. While Russian crude still accounts for roughly 27 percent of India’s supply, OPEC (Organisation of the Petroleum Exporting Countries) nations, led by Iraq and Saudi Arabia, now provide 53 percent.
US oil imports have also nearly doubled over the past year, though India faces competition from the European Union, which is making large investments in US energy.
Analysts say that switching from Russian to Venezuelan oil fits US goals. However, it would be costly, logistically tricky and operationally complex for India, needing careful planning and big discounts to work.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
