Announcing the tariffs on Truth Social, Trump accused Venezuela of being “very hostile to the United States” and of deliberately sending criminals into the country. He stated that the US would impose a 25% duty on any nation that continues to import Venezuelan oil, adding that this would be in addition to existing tariffs.
Venezuela oil import threat: How will it impact India?
India is among the key buyers of Venezuelan oil, having imported 22 million barrels in 2024. In January, its purchases rose to over 254,000 barrels per day (bpd), accounting for nearly half of Venezuela’s total exports of 557,000 bpd. In December 2023, imports stood at approximately 191,600 bpd, with Reliance Industries securing 127,000 bpd.
The newly imposed tariff could increase procurement costs for Indian refiners and disrupt supply chains. The order states that the tariff will remain in place until a country ceases Venezuelan oil imports for at least a year, though the US retains the power to revoke it earlier at its discretion.
China, the largest buyer of Venezuelan crude, received around 503,000 bpd in February—55% of Venezuela’s total exports. Other key importers include Spain, Italy, and Cuba. The US itself has been purchasing Venezuelan crude, but those imports are set to end in early April unless Washington extends the wind-down period.
Indian refiners may now have to reassess their procurement strategies. Separaely, Reuters reported citing sources that companies such as Indian Oil Corp and Bharat Petroleum Corp have been issuing fewer spot tenders for crude purchases, as Russian supplies have started stabilising following disruptions caused by Western sanctions. With Russian oil shipments resuming through non-sanctioned tankers, Indian refiners might look at increasing Russian crude imports to offset any cost escalation caused by the US tariffs on Venezuelan oil.
Trump’s tariff strategy and rising trade tensions
The tariff on Venezuelan oil is just one part of Trump’s broader trade policy. The US administration is also set to announce new reciprocal tariffs on imports of automobiles, pharmaceuticals, and semiconductors on April 2—the same day the Venezuelan oil duty is expected to take effect. Trump has long used tariffs as a tool to exert pressure on both allies and rivals, and his return to the White House has seen an escalation in protectionist measures.
Treasury Secretary Scott Bessent has indicated that Washington is in talks with several trading partners about adjusting trade imbalances. He also mentioned that the upcoming tariff measures would target around 15 nations, which he referred to as the “dirty 15.”
Why Trump wants to curb Venezuela oil imports
Trump’s announcement follows rising tensions between the US and Venezuela. The latest trade restrictions come after Washington suspended deportation flights to Venezuela, accusing Caracas of failing to honour an agreement to take back migrants. Venezuela, in turn, refused to accept deportees, though a new deal was recently reached to restart these flights. Nearly 200 Venezuelan nationals were deported from the US through Honduras under the new arrangement.
Meanwhile, the US has extended an operational waiver for Chevron in Venezuela until May 27. The American oil giant has been working under a sanctions exemption, allowing it to continue limited activities in the country. The waiver extension suggests that Washington is taking a selective approach to its sanctions policy, keeping economic leverage over Venezuela while maintaining some flexibility for US companies operating there.
India looks at big risks
For India, the impact of these tariffs will depend on how refiners respond to the potential cost increases. If Venezuelan crude becomes too expensive due to additional duties, companies may seek alternative sources, including increased reliance on Russian oil. However, the global crude market remains volatile, and any supply shifts could have broader implications for pricing and energy security.
If the US tariffs lead to increased oil prices, they could add to inflationary pressures in India, affecting transport, manufacturing, and overall economic growth. With geopolitical uncertainties persisting, Indian refiners may have to navigate a complex landscape of shifting trade policies and supply chain realignments in the months ahead.
Content Source: economictimes.indiatimes.com