India-US trade deal: Can New Delhi switch from Russian to Venezuelan oil as Trump wants? | World News

New Delhi: When US President Donald Trump announced the signing of a trade deal with India on Monday, he said the deal would involve New Delhi moving away from Russian oil. He claimed that Prime Minister Narendra Modi had agreed to stop buying crude oil from Russia and instead buy more oil from the United States and Venezuela, whose oil industry effectively came under US control following the capture of President Nicolás Maduro earlier this year.

In response, Trump reduced trade tariffs on Indian goods across the board from 50 percent to 18 percent. Half of the 50 percent tariff was imposed last year as a penalty on India’s oil imports from Russia, which the White House said helped finance Russian President Vladimir Putin’s war in Ukraine.

Since the announcement, India has not publicly announced the halt of oil purchases from Russia or the start of imports from Venezuela. Russia has not received any official signals from India regarding the proposed change, Kremlin spokesman Dmitry Peskov said on Tuesday (February 3).

Analysts say that the transition from Russian oil to Venezuelan oil is not easy at all. Factors such as costs, distance, oil quality and market fluctuations all complicate New Delhi’s decisions.

Trump’s move against Russian oil

Trump has been pressuring India for months to stop buying Russian oil. After Russia invaded Ukraine in 2022, the United States and the European Union imposed a price ceiling on Russian crude oil to limit Russia’s war financing. India responded by purchasing large quantities of discounted Russian oil. Before the war, the country received only 2.5 percent of its oil from Russia. It currently imports about 30 percent, making it the second largest buyer after China.

In 2025, Trump doubled trade tariffs on Indian goods and imposed sanctions on Russia’s largest oil companies, threatening secondary sanctions against countries or companies that continue to trade with them. Since Maduro’s kidnapping, the United States has taken effective control of Venezuela’s oil sales.

With an estimated 303 billion barrels of oil reserves, more than five times the size of the United States, Venezuela has the largest proven oil reserves in the world. While US officials see Venezuelan crude as a viable alternative for India, analysts warn it will be operationally complex.

India’s dependence on Russian oil

India currently imports around 1.1 million barrels per day (bpd) of Russian crude (up from 1.21 million bpd in December 2025 and 2 million bpd in mid-2025). After refining, approximately 73 liters of oil are obtained from one barrel, as well as other products such as jet fuel, plastic and household goods.

Although India reduced imports from Russia, it did not stop completely. Indian officials had said they needed to import Russian oil after the Ukraine war because other suppliers were sending their oil to Europe and buying that oil would help keep energy prices stable and affordable for people in the country.

While major refineries such as Hindustan Petroleum Corporation (HPCL), Mangalore Refinery and Petrochemicals (MRPL) and HPCL-Mittal Energy have stopped purchases from Russia in the wake of US sanctions, Indian Oil Corporation (IOC), Bharat Petroleum and Reliance Industries are expected to follow suit.

Difficulties of stopping Russian oil

Analysts warn that shutting down Russian oil altogether would be costly and could increase energy prices. Petroleum Minister Hardeep Singh Puri stated that the supply disruption will lead to serious global consequences.

Analysts said halting imports would divert Russian oil to China and shadow tanker fleets, increasing global freight rates.

Indian refineries have benefited from discounted Russian crude oil in the last two years. Observers argue that turning to higher-cost alternatives such as U.S. or Venezuelan oil would squeeze refinery margins and lead to higher prices for consumers.

Nayara Energy, a private Indian refiner majority owned by Russia’s Rosneft, is heavily dependent on Russian crude oil and will shut down refinery operations for maintenance in April. Analysts say the US is unlikely to give special permission to Russian-backed companies, making it unclear whether India will be able to completely replace the resources.

Venezuela alternative

India has been importing oil from Venezuela in the past. In 2019, these imports reached approximately $7.2 billion, accounting for approximately 7 percent of India’s total oil purchases. Sanctions later halted those imports, but some Indian officials are still in Caracas to work on energy and trade cooperation. Refiners say they will consider Venezuelan crude only if it is feasible and cost-effective.

Distance and cost are big challenges. Venezuela is roughly twice as far from India as Russia, making shipping much more expensive. Venezuelan crude oil is heavier and richer in sulfur, so it requires specialized refineries. Only a few Indian refineries can process this type of oil without mixing it with lighter crudes.

Analysts estimate that this change could increase India’s oil import costs by $6-8 per barrel, potentially increasing its annual import bill by $9-11 billion; This is approximately equivalent to India’s health budget.

Venezuela also produces barely one million barrels a day, which is not enough to replace India’s imports from Russia. Political instability, foreign investment laws and debt restructuring will further slow down the increase in production.

Diversification efforts

India is exploring multiple sources for oil and imports currently come from around 40 countries. While Russian crude oil still accounts for roughly 27 percent of India’s supply, OPEC (Organization of Petroleum Exporting Countries) countries led by Iraq and Saudi Arabia now supply 53 percent.

US oil imports also nearly doubled last year, although India faces competition from the European Union, which has invested heavily in US energy.

Analysts say the switch from Russian oil to Venezuelan oil is in line with US goals. But this will be costly, logistically challenging and operationally complex for India; It will require careful planning and large discounts.