In a significant shift in global energy dynamics, the discount on Venezuelan oil for Indian refiners has narrowed to its lowest level in years, reaching just $4–$5 per barrel relative to ICE Brent as of February 2026.
This “record low” discount marks a sharp departure from the deep price cuts previously offered by Caracas and is primarily driven by the United States asserting control over Venezuelan oil sales through major international traders.
Why the Discount Has Narrowed
The cheap “sanction-burdened” oil era for Venezuela is ending as the trade moves into more formal channels following the capture of President Nicolás Maduro in January 2026.
- Transition to Global Traders: Sales are now being managed by top international firms like Vitol and Trafigura under U.S. licenses. This has professionalized the bidding process, removing the “risk premium” that previously allowed Indian refiners to demand massive discounts.
- U.S. General Licenses: On February 13, 2026, the U.S. issued General License No. 46 to Reliance Industries, allowing it to buy directly. While this simplifies logistics, it also forces transactions closer to market parity.+1
- The Russian Pivot: India is actively reducing its intake of Russian Urals (which currently trade at a deeper $9/bbl discount) to secure a broader trade deal with the Trump administration. This has created artificial demand for Venezuelan crude, further driving up its price.
Comparison: Crude Pricing for Indian Refiners (Feb 2026)
While Venezuelan oil is becoming more expensive, it remains a strategic choice for India’s complex refineries optimized for “heavy” crude.
| Crude Source | Current Discount to Brent | Suitability for Indian Refiners |
| Russian Urals | $9.00 / bbl | High (though imports are being slashed) |
| Venezuelan Merey | $4.00 – $5.00 / bbl | High (Ideal for Reliance/IOC complex units) |
| US WTI | Near Parity | Moderate (Lighter grade) |
Recent Indian Acquisitions
Despite the narrowing discounts, Indian state and private refiners are locking in volumes for April 2026 delivery:
- Reliance Industries: Purchased 2 million barrels from Vitol in early February.
- IOC & HPCL: Jointly acquired 2 million barrels of Merey crude from Trafigura on February 9.
- Strategic Shift: State-owned refiners like MRPL are also evaluating Venezuelan crude after discontinuing Russian imports to align with New Delhi’s “Sovereign AI” and trade objectives with Washington.
“The golden phase of spectacular windfalls from cheap sanctioned oil is ending. Indian refiners are entering a more disciplined, efficiency-led cycle where diversification is the priority over sheer discount depth.” — CareEdge Analysis, Feb 2026.
