New Delhi: The dramatic capture of Venezuelan President Nicolás Maduro by US forces could yield significant economic dividends for India, with domestic refiners poised to benefit from renewed access to discounted heavy crude oil.
According to a report released on Monday by Choice Institutional Equities, the shift in control over Venezuela’s vast oil fields is expected to facilitate the flow of heavier crude barrels to the market. These barrels, which typically trade at a discount to Brent crude, are particularly suited to India’s complex refinery infrastructure, potentially boosting gross refining margins (GRMs) across the sector.
The report notes that India previously imported up to 400,000 barrels per day (KBD) of Venezuelan crude. The geopolitical shift could also unlock opportunities for Indian upstream players. With restrictions potentially easing, Indian firms may gain access to the necessary equipment and investment channels to ramp up output from their existing stakes in the San Cristobal and Carabobo-1 fields.
Brokerage estimates forecast Brent crude to average approximately $61.5 per barrel in CY26. While fresh Venezuelan supply is expected to weigh on prices starting next year, the influx of heavier barrels could accelerate the rationalisation of simpler refineries globally, as more complex plants in India and China come online. This dynamic is expected to improve refining cracks over the medium term.
Following Maduro’s arrest on January 3 on charges including narco-terrorism and cocaine importation, US President Donald Trump announced that American oil companies would invest in reviving Venezuela's energy infrastructure.
However, the report cautions that a rapid production surge is constrained by years of chronic underinvestment in the state-owned oil company, PDVSA. Even in a best-case scenario, production is projected to rise by only 150 KBD in 2026 through operational spending, with larger increases requiring significant capital injection.
Despite holding the world’s largest oil reserves at 303 billion barrels, Venezuela’s production had slumped to roughly 0.9 million barrels per day by November 2025, a sharp decline from the 2 million barrels per day recorded in the early 2010s.
(Inputs from IANS)