Impact of the US-Venezuela Conflict on India

January 7, 2026

The US has finally seized control of Venezuela’s oil reserves. Venezuela’s oil business is currently under US control. Since India is a major importer of crude oil and has to import 85 percent of its crude oil needs, it is reasonable to consider the impact of such actions on India when such a crisis arises. We are examining the benefits and losses for India from the perspective of Venezuela being an oil-supplying country.

A report from the economic research institute GTRI has been released, which states that the US control over Venezuelan oil wells will not cause any significant harm to India. Previously, India imported a large quantity of crude oil from Venezuela, but when the US imposed sanctions on the sale of Venezuelan oil, India also reduced its crude oil imports from Venezuela by 81.3 percent in 2024-25. Now, India is importing oil worth only $2.55 billion. However, India also exports goods worth $95.3 million to Venezuela. Trade between India and Venezuela was continuously declining due to US sanctions, reduced trade volume, and the long distance.

India exports pharmaceuticals, medicines, machinery, and textiles to Venezuela. We import crude oil from them. At one point, Venezuelan oil accounted for 10.6 percent of our crude oil production, but after the sanctions, it has fallen to only 3.6 percent. A digital agreement was also signed to increase this trade, but the situation has now changed. Now, everything will happen according to the US’s wishes. However, experts say that India owes Venezuela $1 billion. If the US gains control of the oil reserves, it could potentially revive the Venezuelan oil industry completely and allow India to recover its outstanding billion-dollar debt. Currently, this seems like a long shot. There are many hopes, but whether they will be fulfilled depends on the circumstances. For now, the way the US has intervened in Venezuela and arrested the president has jeopardized the digital agreement recently concluded between India and Venezuela.