Different in execution, US actions seek to reshape global energy leverage

January 5, 2026

New Delhi: US President Donald Trump made headlines with his statement that the US will now run Venezuela’s oil industry and that American companies will rebuild it. Following the recent action in Caracas, Trump hinted that the US could impose additional tariffs on Indian goods if India did not stop purchasing Russian oil. The US has already imposed “retaliatory tariffs” on India over this issue. Western countries have criticized India for purchasing discounted Russian offshore crude, while many European countries still use Russian energy.

Impact on the Global Oil Market and Venezuela’s Supply

On March 24, 2025, Trump issued an executive order stating that a 25% tariff could be imposed on all products from countries importing oil from Venezuela. Although Venezuela has the world’s largest oil reserves, its share of global production last year was less than 1%, primarily due to policies and sanctions. Venezuelan oil is expensive to extract and refine, so profitability will remain a challenge if it comes under US control. China, which plans to import 400,000 barrels per day from Venezuela in 2025, could be affected by this change, while India currently imports only about 30,000 barrels per day under US waivers. Other countries, such as Spain, Cuba, Italy, Singapore, and Vietnam, also import Venezuelan oil, but the volumes are small or inconsistent.

US Strategy: Energy Advantage and Partnership with India

US actions against Venezuela, Russia, China, and India—albeit in different ways—are primarily driven by energy priorities. The US is attempting to shift the global energy balance through sanctions, trade controls, military pressure, and targeted cooperation. Indian refiners and state oil companies could profit or lose depending on US pressure and Venezuela’s oil supply restructuring. US sanctions following the Ukraine war are aimed at reducing revenues from Russian crude and LNG, while the focus on China is on critical minerals and industrial inputs. Additionally, the US is looking to India for energy cooperation and as a strategic partner, including through the Strategic Clean Energy Partnership, civil-nuclear, and critical minerals cooperation, to guide India toward low-carbon energy and alternative supply sources.