Venezuela is now sending its crude oil to India on a large scale. Following a new supply deal between Venezuela and the US, Venezuelan oil exports have increased, and for the first time, shipments are being sent to India via Very Large Crude Carriers (VLCCs).
According to a Reuters report, trading companies and buyers have booked Very Large Crude Carriers (VLCCs) for the first time to import oil from Venezuela. These tankers can carry up to 2 million barrels of crude oil at a time. This capacity is almost double that of Suezmax tankers and almost four times that of Aframax tankers. This will reduce transportation costs and make delivery faster. At least three VLCCs chartered by Vitol and Trafigura—Nisos Kea, Nisos Kythnos, and Arzana—have been given loading slots at PDVSA’s Jose terminal in March. All these ships will leave for India. In addition, another supertanker, the Olympic Lion, is also headed to Venezuela.
opportunities for india
Before the US ban was imposed in 2019, India was the third largest buyer of Venezuelan oil. After the ban the supply had almost stopped. Now, trade is normalizing after some relaxations under the US licensing framework. American company Chevron has sold Venezuela’s Bosquehan heavy crude to Reliance Industries for the first time since December 2023. This is the first such big sale in almost six years. Reliance has also bought another cargo of 2 million barrels from Vitol and is exploring the possibility of buying directly from PDVSA. Trading companies have also sold Venezuelan heavy crude to Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and HPCL Mittal Energy. India is taking this step to reduce its dependence on Russian oil and diversify its sources.
What will be the price of oil?
Indian refiners are showing interest in Venezuela’s discounted heavy crude. Although profit margins have declined slightly due to the lag in the global market, larger cargoes could reduce freight costs, improving economics. Earlier this year, most Venezuelan oil was being transported in medium-sized tankers to storage centers in the US or the Caribbean. This change in VLCCs is being considered a major logistics upgrade.
Venezuela’s oil exports increased
Following the easing of restrictions, Venezuelan oil exports rose to about 800,000 barrels per day in January, from about 500,000 barrels per day in December. However, this rapid growth has left millions of barrels of oil sitting in storage—a resource that Indian refiners can play a key role in harnessing. Overall, this new phase of oil supply from Venezuela to India through supertankers is emerging as an important part of the changing dynamics of global energy trade and India’s energy security strategy.
