Venezuela Emerges as India's Third Largest Crude Oil Supplier Amidst Hormuz Crisis

As the race to find alternative energy sources continues in the wake of the war in Iran and the closure of the Strait of Hormuz, Venezuela has emerged as India's third largest crude oil supplier this month. According to data monitoring energy supplies, oil shipments from Venezuela to India have increased by approximately 50 percent compared to April.

Venezuela's acting President Delcy Rodríguez is expected to visit India next week. US Secretary of State Marco Rubio stated that she will discuss oil sales.

It is estimated that the South American nation of Venezuela has approximately 303 billion barrels of oil reserves, which is about 17 percent of the total oil reserves discovered worldwide. This oil reserve is considered larger than the reserves held by Saudi Arabia and the United States. However, Venezuela's oil production had weakened due to years of US sanctions and weak government management.

As the Middle East gets caught in the grip of war and the global oil market becomes increasingly volatile, Washington, which took control of Venezuela's oil industry after former President Nicolas Maduro was kidnapped from Caracas by US forces in January, now appears eager to bring Venezuelan oil back to the global market.

Amidst the global energy crisis that began after the US-Israel war in Iran, India has been increasing its purchase of Russian oil. This has displeased the United States, as Washington argues that those revenues are supporting Russia's war in Ukraine.

Before the Iran war began, Indian Prime Minister Narendra Modi had pledged in February to stop purchasing Russian oil and instead buy oil from the United States and Venezuela.

Rubio, who is visiting India from May 23 to 26 to discuss trade, defense cooperation, and energy security, said that Washington now wants India to adopt the same path.

'We want to sell as much energy as they buy,' Rubio said. 'We also see an opportunity in Venezuelan oil. In fact, as I understand it, Venezuela's interim president is also coming to India next week.'

According to analysts, Washington is seeking to restructure the global energy supply network. This strategy aims to reduce Iran's influence and simultaneously strengthen its control over Venezuela's oil sector.

How did the Hormuz crisis affect India?

Under normal circumstances, about half of the crude oil India imports comes from Gulf producing nations through the Strait of Hormuz. Large quantities of liquefied natural gas and petroleum gas are also imported through the same route.

However, as tensions around Iran escalate, this narrow sea route has become unusable.

After some US sanctions were eased, India resumed importing Iranian oil in April after seven years. But that supply was again halted due to the US naval blockade, which stopped oil shipments from Iranian ports. No Iranian oil cargo has reached India this month.

Meanwhile, supplies from Saudi Arabia, India's third-largest oil supplier, have also decreased by about half. Supplies, which were 670,000 barrels per day in April, have decreased to about 340,000 barrels per day this month.

Indian officials have also expressed concern about maritime security in the Gulf region. It is reported that 13 Indian ships are currently stranded there. India states that these ships need to be safely returned before sending new ships.

Recently, several ships related to India have been captured or attacked near the Strait of Hormuz and the coast of Oman. A cargo ship flying the Indian flag sank in Omani waters. It was suspected that the fire on the ship was caused by a drone or missile attack.

This disruption has severely affected the global supply system and increased the demand for alternative oil sources. This is why countries like Venezuela are getting opportunities.

Meanwhile, India has maintained its reliance on Russian oil already loaded on tankers, as Washington extended the exemption from sanctions on Russian oil shipments for another 30 days.

However, according to analysts, this is only a short-term solution, as the US is increasing pressure on India to reduce its imports of Russian energy.

Mark Ayub, an energy policy researcher and consultant, says, 'India essentially has only two options now: either restricted Russian crude oil or Venezuela's abundant crude oil.' He further adds, 'The exemption for Russian oil only applies to already loaded cargo. And a large portion of that supply is now almost depleted.'

From Al Jazeera