What Happened
- State-owned Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd (HPCL) jointly purchased 2 million barrels of Venezuelan Merey crude oil from trader Trafigura, for delivery in the second half of April 2026.
- Distribution: 1.5 million barrels to IOC's Paradip refinery in Odisha and 500,000 barrels to HPCL's Visakhapatnam facility in Andhra Pradesh.
- This is the second Venezuelan crude deal since imports resumed, following Reliance Industries' earlier purchase of 2 million barrels from Vitol.
- The resumption follows US licensing approvals granted to traders Vitol and Trafigura for selling Venezuelan oil, after India had halted purchases due to reimposed US sanctions.
- The purchases are reportedly linked to the India-US trade framework, where India agreed to reduce Russian oil purchases and increase US and Venezuelan oil imports.
Static Topic Bridges
US Sanctions on Venezuela and India's Oil Imports
The US imposed sweeping sanctions on Venezuela's oil sector under the first Trump administration in 2019, effectively barring most countries from purchasing Venezuelan crude. India's imports from Venezuela peaked at USD 7.2 billion in FY2019 before falling to zero in FY2022 and FY2023. A brief sanctions relief in October 2023 allowed limited imports, which were reversed in mid-April 2024. The recent licensing of specific traders (Vitol, Trafigura) represents a selective easing tied to broader geopolitical objectives.
- US sanctions on Venezuelan oil: first imposed 2019
- India's Venezuela oil imports: peaked at USD 7.2 billion (FY2019), fell to zero (FY2022-23)
- Brief resumption: FY2024 (USD 802 million), FY2025 (USD 1.41 billion)
- 2024 average imports: 63,000 barrels per day (up 500% from 2023)
- Sanctions eased via trader-specific licenses to Vitol and Trafigura
Connection to this news: The IOC-HPCL purchase demonstrates how US sanctions policy directly shapes India's crude oil sourcing strategy. The licensing mechanism allows the US to channel Venezuelan oil through approved intermediaries while maintaining broader sanctions architecture.
India's Crude Oil Import Diversification
India is the world's third-largest oil consumer and imports approximately 85% of its crude requirements. After 2022, Russia emerged as India's top crude supplier (displacing Iraq and Saudi Arabia), with Russian oil comprising roughly 35-40% of total imports by volume due to steep discounts. The India-US trade framework's emphasis on reducing Russian oil purchases represents a significant shift in India's energy diversification strategy, potentially redirecting volumes toward Venezuelan, US, and Middle Eastern sources.
- India's crude oil import dependence: ~85%
- India's rank as oil consumer: 3rd globally
- Top crude suppliers (FY25): Russia (~35-40%), Iraq (~18-20%), Saudi Arabia (~14-16%)
- India's total crude import bill (FY25): approximately USD 150-160 billion
- Merey crude: heavy sour crude from Venezuela, suitable for complex refineries like Paradip and Jamnagar
Connection to this news: The Venezuelan crude purchases align with India's strategic interest in diversifying beyond Russian dependence, while the trade-linked nature of the deal illustrates how energy policy is increasingly intertwined with trade negotiations.
India's Refining Capacity and Strategic Oil Reserves
India has a total refining capacity of approximately 256 million tonnes per annum (MTPA), making it the fourth-largest refiner globally. Indian refineries — particularly those operated by Reliance, IOC, and HPCL — are configured for complex refining that can process heavy, sour crudes (like Venezuelan Merey), extracting higher value from cheaper feedstock. India also maintains Strategic Petroleum Reserves (SPR) at three locations — Visakhapatnam (1.33 MMT), Mangalore (1.5 MMT), and Padur (2.5 MMT) — with Phase II expansion planned at Chandikhol and Padur.
- India's refining capacity: ~256 MTPA (4th largest globally)
- IOC Paradip refinery: 15 MTPA capacity, complex refinery capable of processing heavy crude
- HPCL Visakhapatnam refinery: 8.33 MTPA capacity
- SPR Phase I: 5.33 MMT (Visakhapatnam, Mangalore, Padur) — equivalent to ~9.5 days of import cover
- SPR Phase II: expansion at Chandikhol (Odisha) and Padur (Karnataka)
Connection to this news: IOC's Paradip and HPCL's Visakhapatnam refineries are well-suited to process Venezuelan Merey crude due to their complex refining configurations, making them the natural recipients for this purchase.
Key Facts & Data
- IOC-HPCL purchase: 2 million barrels of Venezuelan Merey crude from Trafigura
- Delivery: second half of April 2026 (1.5 million to Paradip, 500,000 to Visakhapatnam)
- India's crude oil import dependence: ~85%
- India's Venezuela imports: peaked at USD 7.2 billion (FY2019), zero in FY2022-23
- India's refining capacity: ~256 MTPA (4th largest globally)
- SPR Phase I capacity: 5.33 MMT (~9.5 days of import cover)
- Traders licensed for Venezuelan oil: Vitol and Trafigura