Venezuela has the world’s largest crude oil reserves
Amidst the increasing tension between Iran and America and the looming threat over the Strait of Hormuz, the South American country Venezuela has emerged as a big help for India. Venezuela has now reached third place in terms of supplying crude oil to India. In this race it has left behind even big countries like Saudi Arabia and America.
This is the same Venezuela, which was suffering from poor economic condition, poor management and stringent international sanctions for the last several years. But now suddenly this country has become the most important center for energy security of the entire world including India. Venezuela’s return to the crude oil game has now raised hopes that inflation may reduce across the world.
Treasure of 303 billion barrels becomes the key to the global economy
The wheel of the world cannot turn without crude oil. When it comes to the largest oil reserves, the names of Saudi Arabia or America usually come to mind. But the real king is Venezuela. There is a huge reserve of about 303 billion barrels of crude oil hidden under the soil of this country. This is about 20 percent of the total reserves of the entire world. Venezuela alone holds five times more oil than America. Countries ranging from Saudi Arabia (267 billion barrels) to Canada (171 billion barrels) are left far behind in this matter.
Also read- Leaving Saudi and America behind, India is now buying cheap oil from Venezuela.
For years, due to poor management and foreign restrictions, this treasure remained buried under the ground. In the year 2020, its production had fallen to less than 4 lakh barrels per day. But now the picture is changing. OPEC’s May 2026 report shows that its production has crossed 11.36 lakh barrels per day due to selective relaxation in American restrictions and investment from global companies like Chevron. If this country exploits its full potential, then the prices of petrol and diesel in the international market can stabilize rapidly.
Middle East tension brought big opportunity for India
India imports about 85 percent of its crude oil requirement from abroad. In recent times, the supply chain coming from the Middle East has been badly affected due to the Iran dispute and the disruption of the movement of commercial ships in the ‘Strait of Hormuz’. Due to this, the supply from Saudi Arabia has reduced to 3.40 lakh barrels per day. In these difficult times, Indian refineries have increasingly turned towards Venezuela.
Figures tell the whole story
Venezuela itself uses about 4 lakh barrels of its production of 11.36 lakh barrels. Out of the remaining 7.3 lakh barrels of exports, India alone is buying 4.17 lakh barrels (data for the month of May). This simply means that more than 55 percent of Venezuela’s total exports are landing directly at Indian ports. China was once its biggest buyer, but Indian companies like Reliance and Nayara have taken advantage of China’s slowness. These refineries are considered to be the most expert in the world in processing Venezuela’s heavy ‘Merey Crude’.
ONGC’s stuck money will come out
India’s bet is not limited to just purchasing cheap oil. This is also a big issue of strategic security. India’s state petroleum company ONGC Videsh has made huge investments worth millions of dollars in the oil blocks of this country. This money was stuck due to instability for a long time. Now, as the situation there is improving, the guarantee of security of India’s investment is also becoming stronger.
This country is very important for India even on the front of global diplomacy. Venezuela has always strongly supported India’s permanent membership in the United Nations Security Council (UNSC). In such a situation, this business partnership between the two countries is laying the foundation of a strong geopolitical alliance.
This is how the global energy crisis will be solved
Countries around the world are currently struggling with supply chain problems. India has made its policy clear that it will not depend on any one region for its energy needs. India’s total oil import has increased by 8% to 49 lakh barrels per day in the month of May. While India took maximum crude oil from Russia at 19.83 lakh barrels per day, UAE was placed at second place. Now Venezuela stands firmly at third position.
The solution to Venezuela’s current economic crisis also lies in the rapid resumption of its oil production. As restrictions ease and foreign investment increases, the country will be able to move back towards its peak level (3 million barrels per day). This will not only bring Venezuela’s crippled economy back on track, but will also provide a cheap, reliable source of energy to huge consumer countries like India.
Venezuela has ‘heavy crude oil’
Generally, crude oil is as thin as water, which can be easily extracted through pipelines. In contrast, most of Venezuela’s oil is of ‘heavy’ or ‘extra heavy’ grade. This oil is thick and very sticky like jaggery syrup. According to the US Energy Information Administration (EIA), it contains high amounts of many metals along with sulfur. When this heavy oil is refined, a large amount of diesel and jet fuel along with asphalt comes out of it. This is the reason why Venezuelan crude is considered most suitable for the production of diesel which powers trucks, ships and heavy machinery around the world.
According to a report by ADI Analytics, ‘light crude’ like American Shale Oil is no match for this heavy oil in terms of making diesel. Due to increase in oil supply from Venezuela, diesel prices may reduce in the global market.
