On February 5, 2026, reports confirmed that Reliance Industries purchased 2 million barrels of Venezuelan crude oil from the international trading house Vitol.
This marks Reliance’s first acquisition of Venezuelan oil in nearly a year and represents a significant shift in India’s energy procurement strategy following a series of dramatic geopolitical developments in early 2026.
1. Transaction Details
The deal was facilitated by Vitol, one of the two trading houses (alongside Trafigura) recently granted licenses by the U.S. to market Venezuelan crude.
- Volume: 2 million barrels (equivalent to one Very Large Crude Carrier/VLCC).
- Delivery: Scheduled for April 2026.
- Pricing: Secured at a competitive discount of approximately $6.50–$7.00 per barrel relative to the ICE Brent benchmark.
2. Geopolitical Context: The “Trump-Modi” Trade Factor
The purchase is closely linked to a new trade dynamic between Washington and New Delhi established in late January 2026.
- The Trade Deal: U.S. President Donald Trump agreed to slash tariffs on Indian goods from 50% to 18%. In return, he publicly stated that India would phase out Russian oil imports and replace them with American and “potentially Venezuelan” crude.
- U.S. Military Operation: The deal was made possible after a U.S. military operation in January 2026 to capture Nicolás Maduro, followed by a supply agreement with interim President Delcy Rodríguez. This cleared the path for U.S. Treasury licenses that allow global refiners to buy Venezuelan oil legally again.
3. Strategic Shift from Russian Oil
Reliance, which was once the largest private buyer of Russian crude (importing over 500,000 barrels per day), has been aggressively diversifying its sources in 2026.
- Halted Russian Purchases: Following the U.S. sanctions on Russian producers like Rosneft and Lukoil earlier this year, Reliance halted its Russian imports to honor the spirit of the new U.S.-India trade agreement.
- Energy Security: The Indian Ministry of External Affairs reiterated that while energy security remains the “supreme priority,” the government is open to exploring Venezuelan oil based on its commercial viability.
4. Impact on Refining Margins
Operating the world’s largest refining complex in Jamnagar, Reliance is uniquely equipped to process the heavy, high-sulfur crude typical of Venezuela.
- Cost Savings: Analysts suggest that replacing expensive or sanctioned barrels with discounted Venezuelan crude could save Indian refiners up to $3 billion annually if the flow remains consistent.
- Competitive Edge: The $7 discount provides a significant cushion against the higher freight costs associated with shipping oil from South America compared to the Middle East.
Conclusion: Reopening the South American Pipeline
Reliance’s return to the Venezuelan market signals the formal reopening of a major energy corridor that had been largely dormant due to sanctions. As Russian barrels exit the Indian mix, Venezuela—now under a new, U.S.-supported interim energy framework—is poised to become a critical pillar of India’s diversified energy portfolio in 2026.
