India is expanding its crude oil procurement from Latin American countries as disruptions stemming from the Iran conflict and tensions in the Strait of Hormuz prompt the world’s third-largest oil consumer to diversify its supply sources, according to ship tracking data.
India’s crude oil imports from Venezuela surged in August, elevating the South American nation to the position of the country’s fourth-largest supplier, according to ship-tracking firm Kpler.
Venezuelan deliveries averaged around 444,000 barrels per day, surpassing Iraq’s 118,000 bpd and the United States’ 153,000 bpd, the data indicated.
Since imports restarted in April, Venezuela has quickly become a more prominent part of India’s oil supply mix.
Indian refiners have boosted their intake of crude from Venezuela, Brazil, and African producers following disruptions in Middle Eastern supplies, while still maintaining a strong dependence on Russian oil.
Russia continues to be the leading supplier, with imports nearing 2 million bpd in August. In June and July, Russian crude imports rose to about 2.6 million bpd, representing more than half of India’s total crude purchases and effectively serving as a safeguard against potential disruptions to traditional Middle Eastern supply routes.
Crude oil is the primary raw resource that refineries process to produce fuels such as petrol and diesel.
India’s approach is increasingly multi-pronged, involving efforts to boost domestic upstream output where feasible, broaden its pool of foreign crude suppliers and transport corridors, expand both strategic and commercial stockpiles, and speed up the adoption of alternatives such as natural gas, biofuels, electric vehicles, and renewable energy sources, according to Sumit Ritolia, Senior Manager - Modelling at Kpler.
The change underscores a wider strategy taking shape in response to the disruption: India is not poised to abandon oil in the short term, but is working to make the crude it continues to rely on more secure and resilient by diversifying both its supplier base and its transport routes.
This highlights a central aspect of India’s present energy security strategy: completely substituting Middle Eastern oil supplies is both impractical and not always cost-effective, Ritolia noted.
Gulf producers remain geographically closer to India, reducing voyage times and transportation costs compared with alternative sources such as Venezuela, the United States, West Africa and Latin America.
Indian refiners have nevertheless shown considerable flexibility in switching between Middle Eastern, Russian and Atlantic Basin barrels.
In recent months, total crude imports have hovered near 5 million bpd, enabling refinery operations to stay relatively robust despite the disruption.
He noted that extended shipping routes from Venezuela, the United States, West Africa, or Latin America can push up freight and insurance expenses, meaning that geopolitical tensions can drive up India’s oil import costs even if refiners manage to obtain adequate physical crude supplies.
"Diversification helps with supply security, but it can only go so far in insulating India from geopolitics. India will still need to import large volumes of crude, meaning any major disruption will ultimately feed through into higher oil prices, freight and import costs," Ritolia said.
Crude oil is also not necessarily the hydrocarbon in which India is most vulnerable to supply disruptions from the Middle East.
The nation is far more reliant on the Middle East for LPG, and LNG likewise poses major risks, as substitute sources and logistical flexibility are comparatively scarce.
This implies that ensuring energy security will increasingly depend on diversifying beyond crude oil, encompassing gas supplies, storage infrastructure, and strategic stockpiles.