US and India in talks over Venezuelan oil deal, according to US envoy

• Trump cut tariffs on Indian goods to 18% and removed a 25% punitive levy after India agreed to stop buying Russian oil, which it had purchased at discounted prices since 2022 sanctions
• The U.S. has granted licenses to trading houses Vitol and Trafigura to supply millions of barrels of Venezuelan oil to India, following the capture of Venezuela's president and a supply agreement with the interim government
• Major Indian refiners including state-run IOC, HPCL, BPCL and private-sector refiners Reliance and Nayara Energy have already ordered Venezuelan oil to replace Russian supplies

US-India Negotiations on Venezuelan Oil Deal

Summary

The United States and India are in active negotiations for Venezuelan oil sales to help India diversify away from Russian crude, according to U.S. Envoy Sergio Gor. The Department of Energy is currently in talks with India's Ministry of Energy, with announcements expected soon.

Key Trade Agreement Details:

• The U.S. agreed to reduce tariffs on Indian goods to 18% under an interim trade deal
• U.S. removed a 25% punitive levy after India committed to ending Russian oil purchases
• The interim deal becomes effective in April 2026, with formal notification expected this month
• India is the world's third-largest oil importer and consumer

Geopolitical Context:

India became Russia's top seaborne crude customer following Western sanctions imposed after Russia's 2022 invasion of Ukraine, buying at discounted prices. The U.S. has made oil supply diversification away from Russian crude a central condition for tariff reductions.

Venezuelan Oil Supply Chain:

The U.S. granted licenses to trading houses Vitol and Trafigura to supply millions of barrels of Venezuelan oil following the capture of Venezuela's president and a supply agreement with interim president Delcy Rodriguez. Major Indian refiners—including state-owned Indian Oil, Hindustan Petroleum, and Bharat Petroleum, plus private-sector players Reliance Industries and Nayara Energy—have reportedly ordered Venezuelan crude.

Market Implications:

This agreement signals a significant shift in India's oil sourcing strategy and represents U.S. efforts to redirect global oil trade flows away from Russia while utilizing Venezuelan supply as an alternative source.