US Promotes Venezuelan Oil to India Amidst Declining Russian Imports

• India plans to cut Russian oil imports from approximately 1.2 million barrels per day in January to potentially 500,000-600,000 bpd, with projected declines to 1 million bpd in February and 800,000 bpd in March
• The Trump administration previously imposed 25% tariffs on India for purchasing both Venezuelan and Russian oil, but is now directing Venezuelan crude to India after capturing Venezuela's president and taking control of its oil industry
• Several major Indian refiners including Hindustan Petroleum, Mangalore Refinery, and HPCL-Mittal Energy have already stopped buying Russian oil, while others are diversifying to Middle Eastern, African, and South American sources

Summary: US Promotes Venezuelan Oil to India Amidst Declining Russian Imports

The United States is encouraging India to resume Venezuelan oil purchases to replace Russian crude imports, according to three sources cited by Reuters. This policy shift follows the Trump administration's capture of Venezuelan President Nicolas Maduro on January 3, 2026, and subsequent control of Venezuela's oil industry.

Key Developments:

• India pledged to significantly reduce Russian oil imports after the U.S. imposed 25% tariffs on countries purchasing Russian crude in March 2025, with an additional 25% tariff on Indian goods implemented in August
• Indian Russian oil imports are projected to decline from 1.2 million barrels per day (bpd) in January to approximately 1 million bpd in February and 800,000 bpd in March
• Two sources indicated imports could eventually drop to 500,000-600,000 bpd, facilitating a potential U.S.-India trade deal

Company Actions:

State-run refiners Hindustan Petroleum, Mangalore Refinery and Petrochemicals, and private refiner HPCL-Mittal Energy have already ceased Russian oil purchases. Reliance Industries, operating the world's largest refining complex, will limit Russian crude to 150,000 bpd from February. Indian Oil Corp and Bharat Petroleum Corp have slowed their Russian purchases.

Market Implications:

India became a major Russian oil buyer after Western sanctions following Ukraine's 2022 invasion made Russian crude cheaper. The shift to Venezuelan oil aligns with U.S. efforts to reduce Russian oil revenues funding the Ukraine war while diversifying India's crude supply sources from Middle Eastern, African, and South American countries. Details regarding whether Venezuelan crude will be marketed through trading houses like Vitol or Trafigura remain unclear.