There may be indirect blessings of the actions of a crazy dictator.
If Might is Right ... Oil and Exploitation also go together along with related controversies and mega crises at the global stage.
Maduro’s 'arrest or kidnaping' raises fresh uncertainty over who controls Venezuela’s oil and how exports are managed.
India is the world’s third-largest consumer of crude oil and depends on imports to meet over 88% of its oil needs.
No Venezuelan oil has imported into India for months now.
As the stage is set for Donald Trump taking over 'control' on Venezuelan oil; analyses suggest Indian oil market need not worry. Rather Bharat consumers and Govt stand to 'gain'.
Only big condition being the Venezuelan oil industry should become sanctions-free and open for business globally.
Even with a change in government, it is unlikely to see any major material increase in oil production for years.
Huge investments will be required to rehabilitate oil infrastructure.
Fact of the matter :: Throughout the 20th century, the US was a key partner for the Venezuelan oil sector, with its major oil companies investing heavily in the country.
Although it accounts for less than 1% of global oil production, Venezuela has the largest oil reserves globally, estimated at over 300 billion barrels or a fifth of the proven oil reserves all over the world.
Thus, Venezuela could emerge as a significantly larger oil supplier than it is now.
Oil is no stranger to conflict. Unsurprisingly, it has emerged as the key factor in America’s capture of Venezuela’s President Nicolás Maduro, says 'Indian Express'.
Facts:
Crude oil and related products such as petrochemicals account for around 90% of Venezuela's export revenues.
They helped keep the heavily sanctioned and isolated government in power despite a severe economic crisis.
Crude production has collapsed by more than 70% since the late 1990s, and Venezuela is now 21st in the list of global producers.
In 2022, the Biden administration gave 'special licences' to resume Venezuelan oil exports under strict conditions.
Washington believed softening Venezuelan sanctions would ease wider oil market pressures in the wake of Russia's invasion of Ukraine.
In October 2025; the Trump administration gave fresh authorization to produce oil in Venezuela, arguing the US company Chevron was a vital partner for Caracas.
Chevron employs around 3,000 people in Venezuela already. The company now stands to benefit and it said it would operate in "full compliance with all relevant laws and regulations."
Trump says large US oil companies will return to Venezuela under his plan. That could include the likes of ExxonMobil and ConocoPhillips.
However, Oil business is a long term gameplan.
The fact - what Trump has avoided so far to talk to - is that it will take several years of work to fix the infrastructure.
American oil companies will find it extremely difficult to make any long-term investment commitment for infra and subsequent oil business.
Venezuela has the world’s largest oil reserves, but accounts for less than 1% of global production.
Petróleos de Venezuela (PDVSA), the state-owned oil company, controls the majority of the oil production and reserves.
This is one of the reasons why experts and industry insiders don’t expect a major change in prices in the near term. The market is also well-supplied and global demand is relatively subdued.
Notably, the recent US blockade of Venezuela and seizure of Venezuelan oil tankers did not have a significant impact on international oil prices.
If the US does succeed in effectively controlling Venezuela’s oil industry, more of its oil is likely to flow globally, potentially having a bearish impact on oil prices. But this is something to see over the long run.
As for India, the country appears to be well-shielded from any direct impact in the near term, as Indian refiners do not import Venezuelan crude.
With the upward pressure on international oil prices also expected to be muted, given an oversupplied market, it is unlikely to create a major pain point for India.
** Venezuela has estimated at over 300 billion barrels or a fifth of the proven oil reserves all over the world.
The world’s largest oil exporter, Saudi Arabia, is second to Venezuela in terms of proven oil reserves.
The relatively insignificant oil production by Venezuela, despite massive potential, is a result of a combination of factors that include US sanctions on the country’s oil and gas sector constraining its energy exports.
Venezuela could now open up the country’s oil sector for more investments, not just from American companies, but from other countries’ corporations, as well.
India — specifically private sector refining giant Reliance Industries (RIL) — was a regular buyer of Venezuelan crude prior to the imposition of US sanctions on Caracas in 2019.
Following the sanctions, oil imports from Venezuela stopped within a few months. As per India’s official trade data, Caracas was New Delhi’s fifth-largest supplier of oil in 2019, providing close to 16 million tonnes of crude to Indian refiners.
In October 2023, the US eased sanctions on Venezuela’s petroleum sector, authorising oil exports without limitation for six months. This led to RIL and a few other Indian refiners restarting oil imports from Venezuela.
But imports then stopped as the sanction waiver was not extended by Washington after its understanding with Caracas on the conduct of free and fair presidential elections in Venezuela broke down.
As for ONGC Videsh’s investments in Venezuela, the company in 2024 sought special approvals from the US to operate two Venezuelan oil projects — San Cristobal and Carabobo 1 — where it holds a participating interest and has pending dividends worth over $500 million. But the approvals are yet to come.
ONGC wants to operate projects in Venezuela under the so-called “Chevron model”, which allows foreign oil companies to operate in the country after receiving specific approvals from the US.
Note -
China has been an important political and economic partner for Venezuela.
In the oil sector, China's CNPC has a joint venture with PDVSA.
Most of the oil produced in Venezuela gets shipped to China.
However, China has not hugely expanded its oil operations in Venezuela despite the US absence.
China criticized the US toppling of Maduro as a violation of Venezuela's sovereignty.
ends
No comments:
Post a Comment