The United States has proposed a 25% tariff on countries importing oil from Venezuela, a move that could affect India’s crude procurement strategy. The tariff, set to take effect on April 2, was announced by former U.S. President Donald Trump in a social media post, citing concerns over Venezuela’s relations with the U.S.
According to reports from The Financial Times and Indian Express, the proposed tariff would apply in addition to existing levies and remain in effect for one year after the last purchase unless lifted earlier by the U.S. Department of Commerce.
India resumed oil imports from Venezuela in December 2023, following the partial easing of U.S. sanctions. Since then, India has become one of Venezuela’s key buyers, with crude shipments increasing from 191,600 barrels per day (bpd) in December 2023 to over 254,000 bpd in January 2024, nearly half of Venezuela’s total exports. Major Indian buyers include Reliance Industries Ltd. (RIL) and Nayara Energy Ltd. (NEL).
India relies on imports for approximately 88.2% of its crude oil consumption. If the proposed tariff is implemented, it could lead to increased costs and potential price fluctuations in global energy markets. Indian Petroleum Minister Hardeep Singh Puri has stated that India will continue to source oil from suppliers offering the best economic terms, given its position as the world’s third-largest oil consumer.
The proposed tariff coincides with a visit from a high-level U.S. delegation led by Assistant U.S. Trade Representative Brendan Lynch, where trade and investment discussions between the two nations are expected to take place.
India’s crude oil demand is projected to reach 252.93 million tonnes in the fiscal year 2025-26, highlighting the importance of securing stable and cost-effective energy sources amid evolving trade policies.
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