Venezuela Emerges as India’s Third-Largest Oil Supplier Amid Hormuz Strait Crisis

Venezuela has become India’s third-largest crude oil supplier this month, as the war in Iran and the closure of the Strait of Hormuz force nations to seek alternative energy sources. Energy tracking data shows oil shipments from Venezuela to India rose nearly 50% compared to April.

U.S. Secretary of State Marco Rubio said acting Venezuelan President Delcy Rodriguez is expected to arrive in India next week to discuss oil sales. Venezuela holds about 303 billion barrels of oil—17% of global reserves—the world’s largest, surpassing Saudi Arabia and the United States, though years of U.S. sanctions and mismanagement have depressed output.

As conflict engulfs the Middle East and oil markets tighten, Washington—which took control of Venezuela’s oil sector after the January abduction of former President Nicolas Maduro in Caracas—now appears eager to return Venezuelan crude to global markets.

India has bought more Russian oil during the energy crisis sparked by the U.S.-Israel war on Iran, irking Washington over revenues that it says support Russia’s war in Ukraine. Before the Iran war began, Indian Prime Minister Narendra Modi pledged to stop buying Russian oil and instead purchase from the U.S. and Venezuela in February.

Rubio, who will visit India from May 23–26 to discuss trade, defense cooperation, and energy security, said Washington wants India to follow through. “We want to sell them as much energy as we can,” Rubio said. “We also think there’s an opportunity with Venezuelan oil. In fact, I understand the acting president of Venezuela will be in India next week.”

Analysts say Washington is trying to reshape global energy supply chains—reducing Iran’s leverage in any peace negotiations—while tightening its grip on Venezuela’s oil sector.

Nearly half of India’s crude imports are typically shipped from Gulf producers through the Strait of Hormuz, along with large volumes of liquefied natural gas and petroleum gas. But this narrow sea lane has become inaccessible due to rising conflict around Iran.

India resumed crude imports from Iran in April after a seven-year hiatus, following limited U.S. sanction relief. Those shipments have now halted, with no Iranian tankers arriving this month due to a U.S. naval blockade. At the same time, supply from Saudi Arabia—previously India’s third-largest supplier—has dropped nearly half, from 670,000 barrels per day (bpd) in April to about 340,000 bpd this month.

Indian officials have also voiced concerns about maritime security in the Gulf, with 13 Indian vessels stranded in the region. Several India-linked ships have been seized or attacked near the Strait of Hormuz and the coast of Oman. An Indian-flagged cargo ship sank in Omani waters after a fire suspected to be caused by a drone or missile strike.

Venezuela holds about 303 billion barrels of proven crude reserves, according to the U.S. Energy Information Administration. Despite that, the country produces less than 1% of global crude output after years of U.S. sanctions. In 2007, former President Hugo Chavez nationalized much of Venezuela’s oil industry, diverting profits from foreign firms to social spending programs. Washington responded with sweeping sanctions, severely limiting Venezuela’s oil exports and access to international finance.

Chevron remains the only major U.S. oil company with significant operations in Venezuela, producing about 250,000 bpd through a joint venture with PDVSA. ExxonMobil is now reportedly close to reaching a deal to re-enter Venezuela for the first time in nearly two decades, according to The New York Times.

Critics argue that Washington’s campaign against Maduro was never purely about democracy or human rights, but about restoring U.S. influence over one of the world’s largest oil reserves and replacing Iranian crude with Venezuelan supply—paving the way for conflict with Tehran. The strategy of selling Venezuelan oil to international energy markets serves multiple U.S. goals: reducing Iran’s leverage on global oil markets as Washington negotiates a peace deal, while pulling Venezuela’s oil sector back into the orbit of U.S. capital.

Rodriguez, though publicly critical of the U.S.-backed campaign to oust Maduro, has won praise from President Donald Trump for cooperating with Washington and helping facilitate new oil deals. Revenue from new export deals is tightly controlled through mechanisms monitored by the U.S. Treasury, while companies involved must operate under conditions set by Washington under U.S. licenses.

Experts say the parallel visits of Rubio and Rodriguez to India show that energy diplomacy is increasingly shaped by geopolitical fallout from wars involving Iran and Venezuela.

India has a long history with Venezuela’s oil sector. State-run Indian companies, led by ONGC Videsh, entered Venezuela in 2008 to secure access to heavy crude reserves. By 2010, Indian firms had acquired stakes in major projects, including Carabobo-1 in the Orinoco Belt, and in 2012, India surpassed China as Asia’s largest importer of Venezuelan crude.

Before U.S. sanctions tightened in 2019, Venezuela was among India’s top oil suppliers. But sanctions on PDVSA forced Indian refiners and traders to sharply cut purchases to avoid U.S. secondary sanctions. The situation shifted after the Washington-backed Caracas regime signed new oil supply deals with the U.S. following Maduro’s removal in January, allowing a few licensed companies to buy Venezuelan crude directly from PDVSA.

Venezuelan oil is particularly well-suited for Reliance Industries’ giant refinery complex at Jamnagar, Gujarat—one of the few facilities globally that can efficiently process ultra-heavy crude. Yet only a handful of India’s other refineries are equipped to handle the heavy, sulfur-rich oil extracted in Venezuela.

Despite that, Venezuela has supplied India with about 417,000 bpd this month, up from 283,000 bpd in April, according to Kpler data. In the preceding nine months, no Venezuelan cargoes reached India. With India’s total crude imports rising to about 4.9 million bpd this month amid the global oil supply crisis, Rodriguez and Rubio hope to secure deals that pave the way for these exports to continue expanding.