The increasing tension between Iran and America and the crisis on the Strait of Hormuz have shaken the world’s energy supply. After the Iran war, the oil crisis is deepening for many countries. Meanwhile, Venezuela has emerged as an important option for India. This month Venezuela has become India’s third largest crude oil supplier.
According to energy tracking data, oil supply from Venezuela to India has increased by about 50 percent in May as compared to April. At a time when oil supply from Gulf countries is being affected, India is looking for alternative sources.
India’s troubles increased due to Hormuz crisis
India imports a large part of its needs from Gulf countries. Almost half of the country’s crude oil is supplied through the Strait of Hormuz. But due to the ongoing conflict around Iran and maritime security crisis, this route has become unsafe. India had resumed oil imports from Iran in April after seven years, but no new Iranian cargo could reach India this month due to the US naval blockade.
At the same time, the supply coming from Saudi Arabia has also decreased rapidly. While in April, India was getting about 6.7 lakh barrels of oil per day, now it has come down to about 3.4 lakh barrels per day. The situation has become so serious that 13 Indian ships are stranded in the Gulf area. Recently, an Indian flagged ship sank after an attack near Oman.
Why is America increasing Venezuelan oil?
Experts believe that America now wants to prepare the global energy supply chain in a new way. US Secretary of State Marco Rubio has said that America wants India to buy as much American and Venezuelan oil as possible. Venezuela has the world’s largest oil reserves. There are about 303 billion barrels of oil present there. However, production there remained affected due to prolonged US sanctions and poor economic conditions. Now America wants Venezuelan oil to reach the global market again, so that the world’s dependence on Iran and Russia can be reduced.
Why is Venezuela important for India?
Oil trade between India and Venezuela is not new. Before 2019, Venezuela was among the major oil suppliers to India. The purchases had reduced after the US sanctions. Heavy crude oil from Venezuela is considered very suitable especially for the refinery of Reliance Industries located in Jamnagar, Gujarat. This is the reason why India is again increasing oil imports from there.
So far this month, Venezuela has supplied about 4.17 lakh barrels of oil per day to India. In such a situation, it is believed that if the Hormuz crisis continues for a long time, Venezuela can play a big role in India’s energy security.
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