India Energy Week 2026 opened in Goa on Tuesday as industry experts flagged a turning point for India’s oil and gas strategy, shaped by disrupted crude trade flows, refining expansion and the growing role of gas and low-carbon fuels.
Sanctions-led disruptions have reduced Russian crude availability, forcing Indian refiners to rely more heavily on Middle Eastern grades. Venezuelan crude may re-enter India’s import mix, analysts said, but only if sanctions ease and pricing turns favourable.
Venezuelan crude: uncertain economics
Premasish Das, Head of Oil Markets and Downstream Research for Asia, the Middle East, Africa and Eurasia at S&P Global Energy, said global trade patterns for Venezuelan crude are already shifting.“China has been the main buyer in recent years, but that may not hold in 2026. Once the barrels start pricing closer to fair value, the teapots will be far less interested, simply because they are very price sensitive.” Das said, noting that increased US interest in processing Venezuelan barrels and the possibility of sanctions relief could narrow discounts.
He said exports to China are likely to soften even without India entering the market, though some volumes will continue to support loan repayment obligations.
“In that context, India may become a realistic destination again,” Das said, adding that Indian refineries have historically processed Venezuelan grades and face no technical barriers. However, he stressed that flows would depend on production recovery, US demand, Chinese obligations and the sanctions regime.
If Venezuelan production returns to pre-blockade levels, India could potentially import 100,000–150,000 barrels per day, assuming US consumption of about 500,000–550,000 bpd and Chinese offtake of around 80,000 bpd. Additional volumes could emerge if upgrader repairs and diluent supply improve, though swaps with other heavy crudes could offset availability.
Das said the US priority remains securing heavy feedstocks for domestic refineries, with traders placing barrels where netbacks are strongest. Venezuelan crude could feature in broader US–India negotiations, but there is no directional push towards India.
On ONGC, Das said production from its Venezuelan assets remains limited. Output in FY 2024–25 stood at 1,870 bpd from San Cristóbal and 970 bpd from Carabobo-1, accounting for less than 1 per cent of ONGC’s international production. “These volumes do not merit the creation of an equity-oil trade corridor,” he said.
Replacing Russian barrels with Venezuelan crude would also be unfavourable from a cost perspective, Das added. “It is not a like-for-like comparison. India would be swapping discounted Russian crude for normally priced Venezuelan supply.”
Russian decline, gas growth and transition
Pulkit Agarwal, Head of India Content at S&P Global Energy, said India’s oil demand outlook remains tied to refining expansion, petrochemical build-outs and downstream growth.
Russian crude imports fell from 1.6–1.8 million barrels per day in the first half of 2025 to about 1 million bpd currently, following sanctions on the Nayara refinery and Russian entities, as well as EU restrictions on Russian-origin products. While PSU refiners have begun a gradual return, private refiners such as Reliance remain largely absent, he said.
The shortfall has been met through Middle Eastern grades and opportunistic US cargoes during open arbitrage windows.
India also signed a major LPG term deal with the US in late 2025, covering about 2.2 million tonnes per annum, or roughly 10 per cent of import volumes, highlighting its focus on supply security. Refining capacity is expected to rise by 20 per cent by 2028 to around 300 million tonnes per annum, with projects such as HPCL’s 180 kbpd Barmer refinery and NRL’s 120 kbpd expansion due in 2026.
On gas, Agarwal said India reiterated its target of raising gas to 15% of the energy mix by 2030, from about 6 per cent currently, though progress remains limited. Favourable weather in 2025 reduced peak power demand, while price sensitivity among industrial users curbed consumption.
Volatility between oil-linked and gas-linked pricing benchmarks — including Brent, JKM, WIM and Henry Hub — has complicated LNG procurement decisions, particularly as weaker oil prices coincided with stronger US domestic gas prices.
City gas distribution remained the main growth driver, with consumption rising 8.8 per cent and its share of total gas demand increasing to 23 per cent from 20 per cent a year earlier. India has nearly tripled the number of automotive CNG stations and doubled domestic PNG connections over the past five years.
India achieved 20 per cent ethanol blending in petrol in 2025, with corn accounting for about 46 per cent of feedstock use. Refiners IOCL and HPCL have modified units at Panipat and Visakhapatnam to co-process used cooking oil and produce sustainable aviation fuel blends, supporting a planned 1 per cent SAF mandate for international flights by 2027.
Agarwal said India made progress in green hydrogen and ammonia markets in 2025 by awarding long-term tenders for refinery and fertiliser demand, while renewable capacity additions remained strong, with 35 GW of solar added during the year.
India’s installed non-fossil power capacity has now crossed 50 per cent, although fossil fuels still account for over 70 per cent of actual power generation. He added that data centre power demand is expected to grow nearly fivefold by 2030, positioning India as the second-largest data centre market in Asia-Pacific.
