In a significant shift for India’s energy procurement, Reliance Industries Limited (RIL) officially secured a general license from the U.S. Treasury’s Office of Foreign Assets Control (OFAC) on February 13, 2026. This authorization allows the operator of the world’s largest refining complex to directly purchase, export, and refine Venezuelan-origin crude oil without violating international sanctions.
The move follows a dramatic month in geopolitics, including the capture of Nicolás Maduro in January and a subsequent US-led $100 billion reconstruction initiative for Venezuela’s oil sector.
Direct Procurement: Cutting Out the Middleman
For much of 2025, Reliance had to rely on complex third-party intermediary networks or temporary waivers to access Venezuelan heavy crude. The new general license streamlines this process significantly.
| Feature | Previous Status (2025) | New Status (Feb 2026) |
| Purchasing Method | Through traders (e.g., Vitol, Trafigura) | Direct from extraction entities |
| Regulatory Risk | High; required individual waivers | General License (Pre-authorized) |
| Supply Source | Spot market only | Term deals allowed |
| Compliance Costs | High (2-5% trader margins) | Significantly Reduced |
The “Jamnagar Advantage”
The Jamnagar refinery in Gujarat is uniquely positioned to benefit from this deal. Its sophisticated deep-conversion units are specifically designed to process “extra-heavy, sour” crudes like Venezuela’s Merey grade.
- Optimizing Margins: Venezuelan crude typically trades at a discount of $5–$7 per barrel compared to Brent. By upgrading this heavy feedstock into high-value products like diesel and jet fuel, Reliance can significantly boost its gross refining margins (GRMs).
- Replacing Russian Urals: The license comes as the U.S. pressures India to diversify away from Russian oil. Under a recent trade deal, the U.S. dropped 25% tariffs on certain Indian goods in exchange for a commitment to reduce Russian imports—making Venezuelan oil a vital alternative.+1
- Volume Potential: Historically, Reliance was a major buyer, taking nearly 25% of Venezuela’s total exports in 2019. The new license could see volumes return to levels of 300,000–400,000 barrels per day.
Geopolitical Context: The “America First” Realignment
The issuance of the license is part of a broader U.S. strategy to stabilize global oil prices while isolating Russia.
- US Treasury Control: Under the terms of the new licenses, royalties for oil and gas operations in Venezuela must be paid into accounts designated by the U.S. Treasury.
- Broader Participation: Reliance is the first Indian refiner to receive this specific clearance, though state-owned firms like Indian Oil (IOC) and HPCL have also recently procured Venezuelan cargoes through traders and are expected to apply for similar direct licenses.
- Trump’s Visit: President Trump signaled on February 13 that he plans to visit Caracas soon, further cementing the “thawing” of relations in exchange for energy security.
“Direct purchase of Venezuelan oil will help Reliance replace Russian oil in a cost-effective way… heavy crude from Caracas is a perfect match for the Jamnagar refinery.” — Industry Source.
