Petroleum: As the US eases sanctions, India to resume buying Venezuelan oil
Virendra Pandit
New Delhi: With the US easing sanctions against oil-rich Venezuela after over four years, India is ready to resume buying cheaper oil from the South American country, Union Petroleum Minister Hardeep Singh Puri said on Friday.
Venezuela has the world’s largest proven oil reserves and a scaling back of US sanctions on its oil industry would benefit both countries economically.
Also, the Venezuelan oil will reduce India’s dependence on Russia from where it imported over 30 percent of its requirements after the Russian invasion of Ukraine in February 2022 as Moscow sold discounted crude to New Delhi.
India last imported from Venezuela nearly 8 percent of its crude requirements, worth USD 6.03 billion, in the financial year 2019-20.
Some refiners in India, which can process such heavy crude oil, are in the process of resuming Venezuelan oil purchases after the US lifted sanctions in October.
“We are willing to buy oil from any country that is not sanctioned,” he said.
Many Indian refineries, including Paradip, can process that heavy Venezuelan oil. And India will buy it, Puri told a press conference.
India is among the largest oil importers with 80 percent of its requirements being imported. It wants to cut its crude import bill and is looking to expand its refining capabilities.
Puri said India currently refines 5 million barrels of oil daily and its refining capacity is rising. “…If the Venezuelan oil comes to market we welcome it,” he said.
The minister also said that some Indian refiners’ money is locked up in Venezuela, referring to ONGC which has dividends pending since 2014 for its stake in Venezuelan projects.
India paid an average price of USD 84.20 per barrel for Russian oil in October, higher than the USD 60 price cap set by the G-7 bloc after the Russian invasion of Ukraine in February 2022.
The United States is easing sanctions on Venezuela after the South American country’s government and opposition agreed to have next year’s election monitored by international observers.
Sanctions will be eased on Venezuela’s oil, gas, and gold sectors. The next election in Venezuela has been scheduled for the second half of 2024, the media reported.
Other sanctions imposed over the suppression of protests and the erosion of democracy remain in place. Washington has warned that the relaxation could be reversed if the electoral pact collapses.
A new general license issued by the US Treasury Department authorized Venezuela, which had been under hefty sanctions since 2019, to produce and export oil to its chosen markets for the next six months.
No time limit has been specified regarding the gold sector.
The US warned Venezuela that they must “define a specific timeline and process for the expedited reinstatement of all candidates”, Secretary of State Antony Blinken said in a statement in October.
“All who want to run for president should be allowed the opportunity,” he said while calling for the release of “all wrongfully detained US nationals and Venezuelan political prisoners.”
The deal between the Venezuelan government and the opposition was signed in Barbados, promising to give all candidates access to public and private media and to guarantee their free and safe movement throughout the country.
The two sides have also agreed to update the voter registries, both inside and outside of the country, to ensure that the millions of Venezuelans who have emigrated can exercise their right to vote.
The Donald Trump Administration had in 2019 imposed harsh sanctions on Venezuela to punish President Nicolás Maduro’s government following his 2018 re-election, which the US described as “illegitimate.” But engagement between the two countries improved under President Joe Biden.
The US has a vested interest in the crisis in Venezuela easing as the dire state of the economy in the Andean country has driven more than seven million Venezuelans to emigrate, with many heading to the US.
