Reliance Secures U.S. Approval for Venezuelan Oil Deal

• Reliance applied for the general licence in January and recently purchased 2 million barrels of Venezuelan oil through trader Vitol as an initial transaction
• The licence allows direct purchase of discounted Venezuelan heavy crude to replace Russian oil, supporting potential U.S.-India trade negotiations as Indian refiners cut Russian oil orders for April delivery
• Reliance operates the world's largest refining complex with 1.4 million barrels per day capacity and was a regular Venezuelan oil buyer before sanctions forced purchases to stop in early 2025

Summary

Key Development:

The United States has issued a general license to India's Reliance Industries Ltd, allowing the refiner to purchase Venezuelan oil directly without violating U.S. sanctions. Reliance applied for this authorization in early January 2026.

Strategic Context:

This decision follows the U.S. capture of Venezuelan President Nicolas Maduro earlier in February 2026. Washington has eased Venezuelan energy sanctions to facilitate a $2 billion oil supply deal and support a $100 billion reconstruction plan for Venezuela's oil industry.

Commercial Impact:

• Reliance recently purchased Venezuelan oil from trader Vitol, which received U.S. licenses to trade millions of barrels post-Maduro's capture
• Direct Venezuelan imports will help Reliance replace Russian oil cost-effectively, as Venezuelan heavy crude trades at a discount
• Reliance operates two refineries with combined capacity of 1.4 million barrels per day, comprising the world's largest refining complex
• The company was a regular Venezuelan oil buyer but ceased purchases in early 2025 due to sanctions

Geopolitical Factors:

President Trump removed a 25% punitive tariff on India and stated New Delhi would increase oil purchases from the U.S. and potentially Venezuela. Indian refiners, including Reliance, are reducing Russian oil purchases for April delivery and beyond, potentially supporting a U.S.-India trade agreement.

Market Implications:

The license accelerates Venezuelan oil exports while reducing crude costs for Reliance. This shift represents a significant realignment in India's energy sourcing away from Russian supplies toward Venezuelan and U.S. oil.