After the reduction of trade tensions with the United States and an 18% cut in tariffs, India may now start importing oil from Venezuela instead of Russia. Learn about its benefits and challenges.

New Delhi: On 2nd of February 2026, a significant trade agreement took place between the President of the United States, Donald Trump, and India. Under this agreement, the customs duty on Indian goods in the United States has been reduced by more than half, now standing at just 25 to 18 percent.

In return, India will gradually have to reduce its crude oil purchases from Russia. Donald Trump clearly stated that India will now meet its energy needs from the United States, and possibly also from Venezuela.
This change is reviving the old relationship between India and Venezuela. There was a time when India used to purchase 500,000 barrels of Venezuelan oil daily. Will this new beginning be beneficial for India? Let’s find out.

New ways for energy security

India imports about 88% of its crude oil requirements. In recent years, Russia had become India’s largest supplier (33-40% of total imports). But such dependence on a single country is risky. Including Venezuela back in its basket would strengthen India’s energy security and provide other options in times of any global crisis.

‘Perfect Match’ for Indian Refineries

Venezuelan crude oil is considered very heavy and sour. Refineries in India, such as Reliance Jamnagar, Indian Oil Corporation, and Bharat Petroleum, are designed to process heavy and sour crude like this.

Advantage: These refineries can efficiently extract high-value products like diesel and jet fuel from heavy oil, which increases profit margins.

Diplomatic victory with America

This agreement is not just about oil, but also about diplomacy. Lower tariffs will give India’s textile, pharmaceutical, and engineering sectors a significant boost in the US market. By distancing itself from Russia, India is further strengthening its ties with the US, which is strategically important for the future.

What are difficulties?

In reality, this change is not so easy:

• Venezuela’s oil production is currently very low. It cannot replace Russia’s entire supply overnight.
• Distance and cost: Bringing oil from Venezuela is much farther than from Russia or the Middle East, which increases maritime shipping costs.

Price difference: India was getting a significant discount from Russia. Can Venezuela supply oil at the same price? That is a big question.

Importing oil from Venezuela is not a magical solution, but it is definitely a smart strategy. It will help India avoid over-reliance on Russian oil, utilize the capacity of Indian refineries, and elevate trade relations with the United States to new heights. For India, this move is not about changing suppliers overnight, but about creating a balanced and secure ‘energy future’.

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