Venezuela crisis unlikely to hit India oil prices in near term: Crisil

On January 3, the US launched a large-scale operation in Venezuela's capital Caracas and captured President Nicolás Maduro and his wife Cilia Flores

The crisis in Venezuela is unlikely to have a major impact on the trade or credit quality of Indian companies due to the country’s limited trade exposure to the South American nation, according to a report by Crisil Ratings.

 

The report also said that US President Donald Trump’s control over Venezuelan oil is not expected to affect global oil prices in the near term.

 

On January 3, the US launched a large-scale military operation in Venezuela’s capital Caracas and captured President Nicolás Maduro and his wife Cilia Flores. The Trump administration said the action was a law-enforcement mission to arrest Maduro on charges including narco-terrorism and conspiracy to import cocaine.

 

 

Venezuela’s oil forms a small share of India’s imports

 

India is unlikely to be impacted by the crisis as direct trade between the two countries is minimal. Crude oil is the main import from Venezuela, but it makes up only about 1 per cent of India’s total crude oil imports. Crude oil and related products accounted for over 90 per cent of India’s total imports from Venezuela, worth around ₹14,000 crore in financial year 2025.

 

Meanwhile, exports to Venezuela were also limited, at under ₹2,000 crore in FY25, representing less than 0.1 per cent of India’s total exports. These exports are spread across sectors such as pharmaceuticals, ceramics, textiles and two-wheelers.

 

Pharmaceutical products formed the largest share of exports at around ₹900 crore, but this still accounted for less than 0.5 per cent of India’s total pharmaceutical exports.

 

Why oil prices matter for India

 

Oil prices remain a critical factor for India, as the country imports nearly 85 per cent of its crude oil requirements, making it sensitive to global supply disruptions and price movements.

 

Crisil noted that it does not expect any material near-term impact of the Venezuela situation on crude oil prices. Over the medium to long term, investments aimed at boosting crude oil production in Venezuela, which has large untapped reserves, could increase global supply and potentially soften oil prices.

 

Brent crude oil prices have remained largely stable, trading slightly above $60 per barrel over the past few days.

 

What if tensions escalate?

 

According to the report, even if tensions escalate and disrupt oil production in Venezuela, the country’s relatively small share of global crude supply (1.5 per cent) is unlikely to cause sustained volatility in global oil prices.

 

Tensions between the US and Venezuela continue, with Trump recently posting a photo on his social media platform Truth Social describing himself as the “Acting President of Venezuela”.

 

Following the US strikes, large-scale protests erupted across Venezuela. The country’s Vice-President and Oil Minister Delcy Rodriguez was formally sworn in as interim president last week. Trump has said that he will control Venezuelan oil and has repeatedly warned Rodriguez to cooperate with the US or face consequences worse than those faced by Maduro.

 

Trump has also said that Venezuela’s interim authorities would hand over between 30 million and 50 million barrels of high-quality, sanctioned oil to the US, to be sold at market prices.