The ongoing geopolitical tension between the United States and Venezuela is not expected to immediately impact India’s oil import bill, according to a report by Bank of Baroda. The report states that global crude supplies are abundant, keeping the import bill stable, given Venezuela’s marginal share of about 1% in global production. Market speculation on the possibility of the US tapping into Venezuela’s reserves has already influenced crude prices.
Bilateral trade between India and Venezuela amounts to $1.9 billion, with exports totaling $217 million and imports at $1.6 billion, with petroleum, oil, and lubricants making up the majority of imports. India’s imports from Venezuela mainly consist of Petroleum, Oil, and Lubricants (POL), especially crude petroleum, with lower unit values compared to other major oil suppliers.
India’s exports to Venezuela have seen a decline, contrasting with the overall growth in India’s global exports, reflecting a slowdown in trade momentum. Venezuela’s crude exports are primarily directed towards the US, China, and India, emphasizing the significance of oil diplomacy in ongoing negotiations. Venezuela’s competitive unit values for crude oil imports contribute to managing import costs for India.
Analysts suggest that an increase in oil production by US companies in Venezuela could potentially lower international crude prices, benefiting countries like India. However, geopolitical uncertainties in the region may hinder significant investments in the Latin American nation.
