Venezuela Crisis and Impact on India’s Energy Security

The US Government on January 29, 2019 imposed sanctions on Petroleos de Venezuela, in a bid to force Venezuela’s President Nicolas Maduro to cede power to the opposition leader Juan Guaido, who declared himself interim president. This move, which essentially translates to an oil ban, is expected to complicate the global oil supply mix and perhaps even push up oil prices.

Threat to India’s Energy Security

• India is the world’s third largest oil importer.
• India imports over 80% of its oil requirements.
• Any hike in global oil price will inflate the import bill and disrupt the country’s fiscal position.

Restricted Flows

• Venezuela was India’s fourth biggest crude supplier after Iraq, Saudi Arabia and Iran in the fiscal 2018-19 till November, 2018.
• It accounted for about 12% of India’s total oil imports.
• So sanctions against the South American nation, coming on the heels of the US sanctions on Iran oil, means that oil flows from the two OPEC nations are now restricted.