Reliance secures US licence to import Venezuelan oil, boosting refining margins
New Delhi: Reliance Industries Limited has received a general licence from the United States allowing it to directly purchase crude oil from Venezuela, a move that enables India’s largest private refiner to restart imports of discounted heavy crude well suited to its refining system, according to sources aware of the development.
The licence permits direct transactions without breaching US sanctions and marks a shift from earlier arrangements that allowed Venezuelan oil sales only through intermediaries. The approval was granted in late January to several international companies, including Reliance, following a relaxation of US restrictions on Venezuela’s energy sector after the capture of President Nicolas Maduro last month.
Reliance operates the world’s largest single-site refining complex at Jamnagar in Gujarat. The facility is configured to process heavy and sour crude grades, making Venezuelan oil, particularly from the Orinoco Belt, a suitable feedstock. These grades are typically sold at a deep discount to global benchmarks due to production and logistical challenges.
Before sanctions were imposed on the Maduro regime in 2019 and 2020, Reliance was a regular buyer of Venezuelan crude. It also resumed purchases during a temporary sanctions relief window in 2024. More recently, when Venezuelan oil began flowing again through traders, Reliance bought 2 million barrels from Vitol.
State-owned refiners have also taken advantage of the easing of restrictions. Indian Oil Corporation and Hindustan Petroleum Corporation Ltd jointly purchased 2 million barrels, with 1.5 million barrels destined for IOC’s Paradip refinery in Odisha and 500,000 barrels for HPCL’s Visakhapatnam unit in Andhra Pradesh. IOC had also been a regular buyer before sanctions.
The renewed access comes as India seeks to diversify crude sourcing amid expectations that imports from Russia will decline. US President Donald Trump said last week that Prime Minister Narendra Modi had agreed to reduce Russian oil purchases and buy more crude from the US and possibly Venezuela, following a trade agreement that led to the removal of a 25 per cent tariff on Indian goods.
For Reliance, Venezuelan crude offers scope to improve refining and petrochemical margins. Heavy barrels can be upgraded into higher-value fuels such as diesel, kerosene and LPG, while their high residual content supports production of petrochemical feedstocks used in polymers and speciality chemicals. Reliance did not respond to requests for comment.
