Reliance Industries secures US licence to buy Venezuelan crude oil

India's largest private refiner gets US general licence to purchase Venezuelan crude directly, potentially diversifying its crude slate and resuming imports after previous sanctions eased

India’s private sector oil refiner Reliance Industries (RIL) last week received a general licence from the US government to purchase Venezuelan crude, said an industry executive who did not wish to be identified.

 

Billionaire Mukesh Ambani-owned RIL operates the Jamnagar complex, the world’s largest and most complex single-site refinery, in Gujarat, capable of processing diverse and heavy crude oil. An email sent to RIL seeking comment remained unanswered. 

US President Donald Trump, after capturing Venezuelan President Nicolás Maduro last month, said American oil companies would “rebuild the oil infrastructure” of the South American nation. Global trading houses Vitol and Trafigura obtained the first US licences to load and export Venezuelan oil. 

Global refiners are currently eyeing Venezuelan crude after the US government eased sanctions on the country. Prior to the US sanctions imposed on Caracas in 2019, RIL and Russia-backed Nayara Energy were the top Indian buyers of Venezuelan crude.

 

Venezuela produces only about 0.8 per cent of the global crude output despite holding 18 per cent of the world’s oil reserves, reflecting years of underinvestment and infrastructure constraints. Until now, China and the US were the largest buyers of Venezuelan oil.

 

Indian state-run refiners have historically not processed Venezuelan crude, with only limited volumes supplied to Indian Oil Corporation (IOCL). With upgrades that have enhanced refineries’ complexity, oil marketing companies including Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) are now capable of processing heavy Venezuelan crude.

 

BPCL could process Venezuelan crude at its Kochi refinery in Kerala and Bina refinery in Madhya Pradesh while HPCL could refine the heavy crude at its Visakhapatnam refinery and the upcoming greenfield refinery in Rajasthan’s Barmer. Indian Oil has historically processed Venezuelan oil at its Panipat refinery.

 

Indian refiners are seeking steeper discounts on Venezuelan oil as its highly viscous and acidic nature makes it difficult to process. BPCL is looking at $10-12 per barrel discounts on Venezuelan oil, Business Standard had reported earlier.