India returns to buying Venezuelan oil to ease supply crunch amid Iran war

India is set to import the most oil from Venezuela in almost six years as over 12 million barrels head to its west coast, reflecting a strategic shift amid West Asia supply disruptions

By Rakesh Sharma and Weilun Soon

 

India is set to import the most oil from Venezuela in almost six years, helping the world’s third-largest crude importer replace West Asia grades disrupted by the Iran war. 

More than 12 million barrels are headed to India’s west coast this month from the South American producer, the most since February 2020, according to data from Kpler. The April-arriving cargoes were likely secured before the recent disruptions in supplies from West Asia, underscoring a longer-term strategic shift rather than a purely reactive move, said Sumit Ritolia, a lead research analyst at the data intelligence firm. 

 

 

The South Asian nation, which imports about 90 per cent of its crude, has been seeking alternatives after the Iran war disrupted flows through the Strait of Hormuz, which typically transits almost 40 per cent of the country’s oil supplies. Venezuela produces similar sulfur-rich blends, and India used to be a major buyer from the OPEC producer before the trade was curbed by US sanctions, which Washington eased after the capture of President Nicolás Maduro in January. 

 

The Ottoman Sincerity — a Suezmax tanker carrying almost 1 million barrels of asphaltic Boscan crude loaded using ship-to-ship transfers off the Carribean island of Aruba — has already arrived at Reliance Industries Ltd.’s Sikka port, and is the first Venezuelan cargo to reach India in a year. Reliance, which has a US license to buy directly from PDVSA, also loaded its first cargo from the state-owned producer on the Bahama-flagged very large crude carrier Helios this week, moving away from earlier purchases routed via Vitol Group and Trafigura.

 

The heavy Venezuelan barrels tend to yield higher proportions of middle distillates such as diesel and jet fuel, which is significant in the current environment where these markets remain structurally tight, Ritolia said. Most of the crude is the nation’s flagship Merey blend, the Kpler data show. 

 

Reliance didn’t immediately reply to an email seeking comments on its Venezuelan imports.