How India’s Energy Security Playbook Intertwines With The US-Dictated Oil Geopolitics

Energy geopolitics is now transforming quietly and consequentially, as India’s economic security enmeshes with the American-dictated oil trade globally.

This shift is most visible today after Washington signalled that it was ready to permit India to continue its crude business with the embattled Venezuela, but under its tight control.

The White House statement, issued late last week, has opened the doors for India to partially revive its frozen trade due to American sanctions, albeit under a US-managed framework.

Combined with the high tariff imposed on India for its oil trade with Russia — blaming New Delhi for funding Moscow’s war in Ukraine — geopolitics has blended rapidly on the reconfigured energy chessboard.

What did the White House say on India’s oil trade with Venezuela?

To a direct question on the US permitting India to do oil business with Venezuela to meet its burgeoning energy requirements, a senior White House official answered in the affirmative with a simple “yes.”

The official, however, emphasised that the modalities to allow India resume purchases of Venezuelan oil were being worked out.

Does this mean Venezuela would be free to trade in oil?

US Energy Secretary Christopher Wright went further. Wright said the Venezuelan oil was once again being allowed to flow, but strictly under US supervision, with marketing and financial flows routed through accounts controlled by Washington.

The arrangement, though, is not a free run for Venezuela. It is just a geopolitical circumvention. The US is just reintroducing the Venezuelan oil, effectively controlled by the Americans through sanctions and political pressure, into the global markets.

What does this US position on Venezuelan oil offer India?

India, being the world’s third-biggest oil importer, sees both an opportunity and a challenge in this US opening.

India’s largest private refiner, Reliance Industries of Mukesh Ambani, said last week that it would buy Venezuelan crude if the US allowed access to other buyers “in a compliant manner,” signalling both commercial pragmatism and geopolitical caution.

Reliance Industries, which showed interest in the Venezuelan crudes, runs the world’s largest oil refinery in Gujarat’s Jamnagar, with a capacity of about 1.4 million barrels per day. The Reliance refinery is optimised for processing heavy, sour crudes such as the Venezuelan Mery and Russian Urals.

The company had halted Venezuelan oil imports in March 2025 following an American punitive tariff of 25 percent on buyers. It received the last Venezuelan cargo in May 2025.

But now that the situation has drastically changed after the US captured Venezuelan President, Nicolas Maduro, earlier this month, and struck a deal with his successor, Delcy Rodiguez, to allow $2 billion worth of crude exports of about 50-million barrels to the US.

How will the development help Reliance?

This provides Reliance an edge over India’s state-run refiners, as it can now source crude from Venezuela as an alternative, at an estimated $3 to $4 per barrel after accounting for currency exchange movements. This can support Reliance’s refining margins, earnings, and profits.

Beyond the Reliance balance sheets, the larger story lies in India scaling down its Russian oil imports, pressed hard by American tariff pressures. Reliance had to stop Russian crude imports in October last year after the US sanctioned Russia’s Rosneft and Lukoil, as did other global buyers. The company also had to deny recent international media reports of Russian oil cargoes heading to Jamnagar.

It is here that the Venezuelan oil, with the American stamp of approval, comes to Reliance’s aid to keep its refinery operating optimally.

What do Indian influencers think of Reliance’s Venezuelan oil options?

Indian strategic affairs expert Brahma Chellaney argued in a post on microblogging platform X that Reliance was implicit in the US’ de facto control of Venezuela’s natural resources, thereby approving the “law of the strongest” in today’s volatile energy market.

He charged Reliance with rushing to be the first foreign entity to line up for buying Venezuela oil seized by the Americans. He said this Reliance move wasn’t “accidental,” as its Jamnagar facility processes heavy crude, the kind that Moscow and Caracas offer.

By choosing to buy American-controlled Venezuelan crude, Chellaney said, Reliance was securing suitable feedstock by aligning with Washington’s foreign policy.

“In effect, it is substituting Russian crude with another source that carries an American stamp of approval. Significantly, this move appears to enjoy the backing of the Indian government, underscoring how commercial priorities and geopolitical accommodation are converging in New Delhi’s energy strategy,” he posted.

Former Army chief General V. P. Malik, however, countered Chellaney’s views by replying on X that Reliance is acting in its commercial interest without compromising national interest.

How has the Indian government reacted to the US tariffs?

Officially, India has stated that it was guided by the imperative of secure “affordable energy” for its 1.4 billion people and the evolving global oil market dynamics.

India’s Ministry of External Affairs spokesperson Randhir Jaiswal, responding to a proposed US bill that would impose a 500 percent duty on countries continuing to buy Russian oil, said New Delhi was aware of the American legislation and was closely monitoring the developments.

While the US tightens the screws on Russian oil flow, it calibrates the Venezuelan crude trade and nudges India to accept its approved suppliers.