The resurgence of geopolitical tensions between the United States and Venezuela is unlikely to pose any significant risk to India’s oil security or trade position, according to a research note by Bank of Baroda.
The report noted that despite Venezuela holding a substantial share of global crude oil reserves, its current contribution to global oil supply remains limited: “Venezuela’s share in global oil production, CY24, has been only 1 per cent amounting to 960 Million Barrels per day (MBPD),” the report said, adding that “in terms of disruption of global oil supply it poses no immediate risk.”
While Venezuela accounts for a large portion of global reserves, the report highlights that supply-side constraints limit near-term implications. “In terms of crude oil reserves, Venezuela’s share is high at 19.4 per cent,” it said, noting that this has “brought forth conjectures of higher oil supplies if the potential of the reserves can be fully utilised by the US.” This expectation has already influenced prices, with crude oil softened in today’s trading session.
From India’s perspective, the report underlines that bilateral trade exposure to Venezuela remains modest. “From India’s perspective, bilateral trade between India and Venezuela is just $1.9 bn with exports at $217mn and imports at $1.6 bn,” it said.
India’s export exposure to Venezuela has also weakened over time. The report stated that “on a five-year CAGR basis, exports to Venezuela have declined by -8.8 per cent,” even as India’s overall exports to the world grew during the same period. Imports from Venezuela, although higher in FY25, do not indicate structural dependence. “Thus no major reliance in terms of imports,” the report said.
Crude oil dominates India’s import basket from Venezuela. “Petroleum crude and products (POL) occupy the major share in India’s import basket from Venezuela, within which crude petroleum is the dominant,” the report noted. Importantly, Venezuela supplies oil to India at a competitive price.
But the report says, “among major countries from which India import oil, the unit value of petroleum products for Venezuela is significantly lower.
Summing up the overall impact, the report clearly states that “the current geopolitical tension between US and Venezuela does not pose any immediate risk” to India. It further emphasised that “we do not foresee any upside risk to India’s oil import bill as global crude supplies is likely to be in a glut mode.”
