Trump’s Venezuela oil plan may benefit India in long run, But no immediate relief

US President Donald Trump’s proposal to take control of Venezuela’s oil industry and invite American companies to rebuild the country’s collapsing energy infrastructure is unlikely to have any immediate impact on India, but energy analysts say it could carry important long-term implications for global oil markets and India’s energy security.

Speaking aboard Air Force One, Trump said American oil companies are “going to go in and rebuild this system,” asserting that the United States would take charge of restoring Venezuela’s oil production if political control shifts. “We’re in charge now, and we’re going to fix it,” Trump told reporters, signalling a dramatic change in Washington’s approach to the oil-rich South American nation.

Venezuela holds the world’s largest proven crude oil reserves — about 303 billion barrels, accounting for roughly 17 per cent of global reserves — yet its oil production has collapsed to nearly 1.1 million barrels per day, down sharply from 3.5 million barrels per day in the late 1990s. Years of corruption, mismanagement, nationalisation of oil assets under former president Hugo Chavez, deteriorating infrastructure and sweeping US sanctions have crippled output. Despite its vast reserves, Venezuela today produces less than 1 per cent of global crude oil, limiting its ability to influence short-term oil prices.

India, which imports over 85 per cent of its crude oil needs, does not currently purchase oil from Venezuela due to US sanctions. As a result, Trump’s plan is not expected to have any direct impact on India in the near term. Following sanctions on Venezuela, India shifted its oil sourcing largely to the Middle East, later increased purchases from Russia after the Ukraine war because of deep discounts, and has since rebalanced again towards Middle Eastern suppliers, leaving Venezuela outside its import basket.

Analysts also point to China’s deep entrenchment in Venezuela’s oil sector as a key constraint. Over the past decade, Chinese state-backed companies have emerged as dominant foreign players through oil-for-loans agreements, tying much of Venezuela’s remaining operational infrastructure to Beijing. This limits the scope for rapid US corporate entry even if sanctions are relaxed and adds a geopolitical layer to Trump’s proposal.

In the longer term, analysts say a successful revival of Venezuelan oil production could increase global supply and place downward pressure on crude prices, indirectly benefiting major importers like India. Indian refiners such as Reliance Industries and Nayara Energy are well-equipped to process heavy crude oil, which Venezuela produces in abundance. Greater availability of such crude could help stabilise diesel markets, which is crucial for India’s transport, agriculture and industrial sectors, and ease inflationary pressures at home.

However, rebuilding Venezuela’s oil industry is expected to take years and require investments exceeding $100 billion. Political uncertainty, unresolved legal questions over resource ownership, continued sanctions and competition for influence between the US and China remain major obstacles. Analysts therefore caution that while Trump’s proposal has generated global attention, India will see no immediate change, with any real impact depending on political stability in Venezuela, clarity on sanctions and the pace of future investment.