Reliance’s ties with Venezuela again after one and a half years
Indian giant Reliance Industries has once again changed its course in the global oil market. The company of Mukesh Ambani, head of the country’s largest business group, has turned to Venezuela after a long gap of about one and a half years. Reliance has resumed purchasing crude oil from Venezuela and this is no small deal. The company has purchased a huge ship carrying 20 lakh barrels of crude oil. This news has come at a time when India’s oil imports from Russia are decreasing and trade equations with America are changing. Let us understand how Venezuelan crude oil will act as a weapon for the country’s energy needs.
One and a half year exile ends
In the middle of last year, Reliance had completely stopped buying oil from Venezuela. This decision was taken due to international sanctions and diplomatic pressures. But now the direction of the wind has changed. Reliance has once again revived its old business relations with the South American country Venezuela. This big order of 20 lakh barrels of oil cannot be seen as just a normal purchase. This is part of India’s strategy, under which the country does not want to depend on just one or two countries to meet its oil needs.
Distance from Russia due to America’s interference
The other end of this whole story is related to Russia. For some time, India had become largely dependent on Russian oil for its energy needs. If we look at the data of Kpler, till June last year, India was buying about 20 lakh barrels of oil from Russia every day. But in January this year, this figure has fallen to just 11 lakh barrels per day. This is the lowest level since November 2022.
Experts believe that due to US sanctions on Russian oil and payment related challenges, India has had to look for new options. At the same time, America has recently interfered in Venezuela’s oil industry and there has been a change in policies after taking action against former President Nicolas Maduro. America’s new policies have given Venezuelan oil an opportunity to return to the international market, which is directly benefiting Indian companies like Reliance.
The diplomacy behind the trade deal
A recent trade deal between India and America has also played an important role in solving this equation. Under this agreement, taxes on Indian exports have been reduced. Interestingly, US President Donald Trump had linked this trade agreement to stopping or reducing oil imports from Russia. Although the Indian government has not officially shared any detailed information on this, market indications suggest that the declining imports from Russia and the resumption of purchases from Venezuela are somehow linked to this diplomacy.
Big step towards energy security
Venezuela is not a new market for India. If we look at the figures of the year 2019, at that time Venezuela used to send about 25% of its total oil exports to India alone. Reliance has also been importing oil from there during the relaxation in American sanctions. Now that the arrival of oil from Russia is decreasing, it is both a compulsion and a need for India to establish friendship with Venezuela again.