Discounted Russian crude has been the cornerstone of India’s energy security plan for almost four years, and it has been a recurring source of friction with Washington. We’re testing that equation once more. President Donald Trump is said to have approved the Sanctioning Russia Act of 2025, a bipartisan sanctions bill in the US Senate that threatens to impose tariffs of up to 500% on nations that continue to purchase Russian gas, oil, or petrochemical products. The bill is getting closer to a floor vote with more than 80 co-sponsors and the White House’s renewed support in July, even though its final text, which is said to have been softened from the first threat, has not yet been made public.
China and India, which collectively receive more than 80% of Russia’s seaborne oil exports, are caught in the crossfire. The law exacerbates India’s already tense trade relations with Washington, which last year levied high tariffs on Indian imports in part due to New Delhi’s purchases of Russian oil. In light of this, Venezuela, which India had previously almost given up on as a supplier, has returned to the discussion as a viable option.
From Option to Afterthought
Venezuela’s significance to India is not new. Ten years ago, Venezuelan crude was actively purchased by Indian refiners led by Reliance Industries and public sector companies like ONGC Videsh. However, due to US sanctions on Caracas, Venezuela’s share of India’s oil imports fell from 6.7% in 2018 to just 0.3% in 2025. Russia, on the other hand, became India’s biggest supplier of crude, increasing from less than 1% of imports before the conflict in Ukraine to about 36% by 2024–2025 as it filled the void left by sanctioned Iranian and Venezuelan barrels.
When US forces arrested Venezuelan President Nicolás Maduro in January 2026 and transported him to New York to face charges of drug trafficking, the situation drastically changed. Washington presented this operation as part of their counter-narcotics campaign rather than a war on Venezuela. The US moved swiftly to reintegrate Venezuelan crude into legitimate international trade under Delcy Rodríguez’s interim leadership, which is now overseen by Washington. This was done to counteract the tightening global supply following disruptions caused by the conflict around the Strait of Hormuz and to steer Venezuelan oil away from buyers like China.
An early and enthusiastic participant in this reopening is Reliance, by obtaining a US general license in February to purchase Venezuelan crude directly from Petróleos de Venezuela, S.A. (PDVSA), the first such authorisation since Maduro’s overthrow. The terms of Venezuela’s re-entry into international markets are still tightly controlled by Washington, as evidenced by the fact that a tanker chartered by Reliance was loading Merey heavy crude at PDVSA’s Jose terminal in June. However, oil proceeds are still routed through US Treasury-administered accounts.
The quantities have increased quickly. After nine months of no supplies, Venezuela supplied India with approximately 417,000 barrels per day (bpd) in May, up from 283,000 bpd in April. According to reports, the acting president of Venezuela was scheduled to travel to India to talk about further increasing oil sales. Smaller refiners have done the same: To comply with the tightening Western sanctions on Rosneft and Lukoil, Mangalore Refinery and Petrochemicals (MRPL) stopped buying Russian crude in January and started looking for Venezuelan barrels.
However, this comes with some restrictions. Venezuela’s heavy, sulphur-rich crude requires specialised refining capacity that only a handful of Indian plants, mainly Reliance’s Jamnagar complex, can process efficiently. Total exports, even after a resurgence, are nowhere near the volume Russia has delivered, and the country’s oil infrastructure would take years and billions of dollars to meaningfully raise output, according to industry analysts.
Strategic Independence in the Face of Stress
Russia has officially shrugged off the development, with the Kremlin stressing that India is free to diversify and has always sourced from different countries, even as Moscow’s oil trade tilts progressively toward China.
For India, the calculus is less about picking a new patron and more about hedging. Leaning on Venezuelan, Middle Eastern and US crude can reduce exposure to a sanctions bill that could impose punishing tariffs, without formally abandoning the discounted Russian barrels. The extent and speed of the Venezuela pivot will depend on whether that balancing act passes a Senate vote, which is anticipated to be difficult given the short legislative schedule before the August holiday.
What’s Next
The longevity of this change will depend on three factors. First, the fate of the Sanctioning Russia Act itself: even its sponsors concede the final text and tariff scale remain unsettled, and sceptics, including former US Treasury official Catherine Wolfram, have questioned whether Washington would truly enforce a 500% tariff against a partner it is simultaneously courting on other fronts. Second, how fast Venezuela’s battered oil infrastructure can be rehabilitated; PDVSA output is rising but remains far short of what would be needed to replace Russian volumes at scale. Third, how Indian refiners balance compliance risk with economics, considering that the amount of Venezuelan oil that units outside of Jamnagar can take is limited by its specialised processing requirements.
None of this means India is losing “strategic autonomy” as a principle. If anything, the Venezuela pivot shows that concept in action: diversifying sources and quietly changing import levels to manage sanctions vulnerability, while avoiding the framing that it is simply following US directions. If the Senate bill is passed, the true test will be whether New Delhi can continue to thread that needle and whether Venezuela’s oil industry can grow quickly enough to make the pivot more than a partial hedge.
