India Turns to Venezuela as Middle East Disruptions Accelerate Crude Supply Diversification
India has been increasing its crude oil imports from Venezuela amid disruptions in Middle Eastern supplies due to the Iran conflict and the Strait of Hormuz. Ship tracking data showed that Indian crude imports from Venezuela have risen sharply in August, making the South American producer the country's fourth-largest supplier.
Venezuela's position in India's supply mix has risen rapidly since imports resumed in April. Indian refiners increased purchases of Venezuelan, Brazilian, and African crude after disruptions to Middle Eastern supplies, while continuing to rely heavily on Russian oil. Russia remains the dominant supplier, with imports close to 2 million bpd in August.
According to Sumit Ritolia, Senior Manager - Modelling at Kpler, 'India's strategy is increasingly operating on several fronts at once: increasing domestic upstream production where possible, diversifying overseas crude suppliers and transportation routes, building strategic and commercial inventories, and accelerating alternatives such as gas, biofuels, EVs and renewables.'
Indian refiners have shown considerable flexibility in switching between Middle Eastern, Russian, and Atlantic Basin barrels. However, longer voyages from Venezuela, the US, West Africa, or Latin America can increase freight and insurance costs, which can raise India's oil import bill even when refiners are able to secure sufficient physical crude.