WASHINGTON: The United States has signalled a significant policy shift that could enable India to resume buying Venezuelan crude oil, with Reliance Industries indicating it would consider such purchases if permissible for non-US buyers. A senior White House official confirmed that the Biden administration is open to India accessing Venezuelan oil, recognizing the country’s vast and growing energy needs. However, details regarding the regulatory framework governing these sales are still under discussion.

The renewed interest from the White House reflects a broader global interest in Venezuelan crude as the US reassesses its sanctions and enforcement strategies. US Energy Secretary Christopher Wright has emphasized that Venezuelan oil could flow again, but only through a mechanism where sales are organized by the US government and proceeds directed into accounts managed by Washington. This approach aims to ensure that the profits benefit the Venezuelan populace while curtailing corruption and misuse.

Before sanctions thwarted trade, Indian refiners, especially Reliance, were significant purchasers of Venezuelan heavy crude, which ideally suits complex refining operations. Any potential resumption of these purchases could aid India in diversifying its crude supply at a time of surging energy demand. Reliance Industries, which operates the world’s largest refining complex located in Jamnagar, noted it is closely observing the evolving policy landscape. A spokesperson from Reliance stated, “We await clarity on access for Venezuelan oil by non-US buyers and will consider buying the oil in a compliant manner.”

The policy change is also designed to reinforce US sanctions while restructuring Venezuela's oil sector. Wright indicated that controlling oil flows and revenues would act as leverage to diminish illicit activities tied to the nation's earlier leadership. Moreover, US officials plan to market 30 to 50 million barrels of Venezuelan oil presently in storage and are likely to permit future production sales alongside the supply of requisite diluents and equipment essential for stabilizing and expanding output.

With Venezuela boasting the world's largest proven oil reserves and India among the fastest-growing energy consumers, the reopening of this trade corridor could have substantial ramifications for global oil markets.