US Offers Venezuelan Oil to India to Cut Russian Imports Amid Tariff Pressure
The US has offered India Venezuelan oil to drastically reduce its Russian crude imports, which the US believes funds Russia's war. This follows previous US tariffs on India for buying Russian oil. India is now significantly cutting Russian oil purchases and diversifying its crude sources, with some refiners halting imports. The move aims to secure a trade deal with the US, though clarity on Venezuelan oil marketing remains unclear after US forces reportedly took over Venezuela's oil industry.
The United States has presented an offer to India allowing it to resume purchases of Venezuelan oil, a strategic move aimed at substantially reducing India's reliance on Russian crude imports. This initiative comes amidst US concerns that revenue from Russian oil sales is financing Moscow's ongoing war in Ukraine. Notably, the US, under the Trump administration, had previously imposed tariffs on India, partly due to its acquisition of Russian oil.Following this development and the tariff pressure, India has decided to significantly scale back its Russian oil imports, with plans to reduce them by several hundred thousand barrels per month and soon bring them below one million barrels per day. This reduction is anticipated to taper further to approximately 500,000-600,000 barrels per day, a step viewed as conducive to securing a trade agreement with the United States. India's Russian oil imports had previously surged after international sanctions on Moscow in 2022 made Russian crude more affordable, but trade data indicates a drop to a two-year low in December.In response to the shifting geopolitical landscape, India is actively diversifying its crude oil sources, increasing imports from the Middle East, Africa, and South America. Major Indian refiners like Hindustan Petroleum, Mangalore Refinery and Petrochemicals, and HPCL-Mittal Energy Ltd have already ceased purchasing Russian oil. While other state refiners, including Indian Oil Corp and Bharat Petroleum Corp, have slowed their acquisitions, Reliance Industries plans to buy some Russian crude from February. Uncertainty persists regarding how Venezuelan oil would be marketed, whether through foreign trading houses or directly by PDVSA, especially given reports of the US instructing Venezuela's government and planning to manage its oil industry indefinitely after the alleged capture of President Nicolas Maduro.
