In the hours after the capture of Venezuelan President Nicolas Maduro by US troops, oil has emerged as a key factor. US President Donald Trump has vowed to tap into the South American country’s oil reserves, adding that American majors would pump in billions of dollars to revive the struggling Venezuelan oil industry and fix its broken oil infrastructure.
Now, the world watches on to see the impact that Trump’s latest moves will have on oil prices. After all, Venezuela is known to have the world’s largest proven crude oil reserves of approximately 303 billion barrels, according to the US Energy Information Administration. That’s more than either Canada or Saudi Arabia, and accounts for roughly 17 per cent of all global oil reserves.
So, how exactly will Maduro’s capture affects oil markets? More importantly, how will this affect India?
We examine the situation and get you the answers.
Venezuelan oil and Donald Trump’s plan for it
Venezuela is estimated to have 303 billion barrels of oil, making it home to the world’s largest proven oil reserves. In comparison, Saudi Arabia has 267 billion barrels whereas Iran has an estimated 209 billion, as per Opec’s numbers for 2025.
However, the amount of oil the South American nation actually produces is tiny by comparison, with CBC News reporting that Venezuela has been producing less than one per cent of the world’s crude oil supply. Caracas has seen production steadily decline from the 3.5 million barrels per day pumped in 1999 to today’s level of about a million barrels per day.
The country’s oil reserves are made up of so-called “heavy, sour” oil. It is harder to refine, but useful for making diesel and asphalt.
After
seizing Maduro, US President Trump made it clear that the US operation is about — at least in part — control of Venezuela’s oil. “We’re going to have our very large
US oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.”
What this means for oil prices
On Monday, oil prices fell with Brent Crude falling by 0.21 per cent at $60.62 per barrel while West Texas Intermediate was off 0.35 per cent at $57.12.
Experts note that there’s a fear that increased volumes of Venezuelan oil entering the market would add to oversupply concerns and put further pressure on oil prices, which have fallen in recent months.
However, others noted that in the short-run, it is unlikely that there will be a significant immediate impact on crude prices. Jorge León, the head of geopolitical analysis for industry intelligence firm Rystad Energy, told Yahoo Finance that while there may be an initial spike, the longer-tail impact will depend on what Venezuela’s post-Maduro landscape looks like. He noted that if the country stabilises quickly, it is likely to be bearish for oil prices as more supply is added to the market over the coming years.
For the long run, experts said that it will take several years of work to fix the Venezuelan oil infrastructure — debilitated by years of sanctions and economic crises — and boost output.
In fact, American oil companies have made no comment yet on such a long-term commitment. Exxon Mobil didn’t immediately respond to a request for comment. ConocoPhillips spokesperson Dennis Nuss said by email that the company “is monitoring developments in Venezuela and their potential implications for global energy supply and stability. It would be premature to speculate on any future business activities or investments.”
Meanwhile, Chevron noted that it was “focused on the safety and wellbeing of our employees, as well as the integrity of our assets. We continue to operate in full compliance with all relevant laws and regulations”.
Impact on India’s oil sector
But what does all this mean for India? Global Trade Research Initiative (GTRI) said that India is unlikely to be affected in terms of energy. That’s because Indian refiners do not import Venezuelan crude.
According to GTRI founder Ajay Srivastava, between the years 2000 and 2010, India imported vast amounts of crude from Venezuela. In fact, at the peak, India imported more than 400,000 barrels of oil from Venezuela. However, since 2019 when US sanctioned the South American nation, volumes have dropped sharply. In 2025, India’s total crude oil imports from Venezuela was only $255.3 million.
Even former Indian Ambassador to Venezuela R Viswanathan told news agency ANI that India is not dependent on Venezuelan oil and that trade between the two countries remains limited. He added, “We are not dependent on Venezuela for oil. Our trade is very little and we have some investment by ONGC in their oil fields… So, this is not going to affect India in any big way.”
In fact, India may benefit from a US-led takeover of Venezuela’s oil sector. Such a move could even potentially unlock around
$1 billion in long-pending dues for India. India’s ONGC Videsh Ltd (OVL) has a 40 per cent stake in the San Cristobal oilfield in the eastern part of Venezuela. However, US sanctions have blocked its access to crucial technology, services, and equipment, thus stranding otherwise commercially viable reserves.
Venezuela has not paid OVL $536 million in dividends up to 2014, as well as a similar amount for subsequent years, as the country refused to permit audits, freezing India’s claims. Additionally, if sanctions are relaxed, Indian operators could move rigs and equipment from domestic fields, including ONGC’s assets in Gujarat, to revive production.
Venezuela crisis and larger impact on India
Apart from the oil issue, India will most likely be insulated from any material impact, noted the GTRI. It noted that the two countries’ trade is small and declining.
In FY2025, India’s total imports from Venezuela were just $364.5 million. Meanwhile, India’s exports to Venezuela were a modest $95.3 million, led by pharmaceuticals worth $41.4 million. “Given the low trade volumes, existing sanctions constraints, and the large geographical distance, the current developments in Venezuela are not expected to have any meaningful impact on India’s economy or energy security,” Srivastava was quoted telling news agency PTI.
Meanwhile,
India has expressed “deep concern” at the developments unfolding in Venezuela, calling upon “all concerned to address issues peacefully through dialogue, ensuring peace and stability of the region”.
The Ministry of External Affairs (MEA), on Sunday, said, “Recent developments in Venezuela are a matter of deep concern. We are closely monitoring the evolving situation.”
“India reaffirms its support to the well-being and safety of the people of Venezuela. We call upon all concerned to address issues peacefully through dialogue, ensuring peace and stability of the region,” added the MEA.
For now, it’s a wait and watch game for the world to see how exactly the situation unfolds.
With inputs from agencies
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