The United States is in active negotiations to arrange sales of Venezuelan crude to India as part of efforts to broaden New Delhi’s sources of oil, U.S. Envoy Sergio Gor said on Friday. Gor told reporters in New Delhi that the Department of Energy is in contact with India’s Ministry of Energy and that officials are hopeful of announcing developments soon.
The talks come amid a package of interim trade measures in which U.S. President Donald Trump agreed this month to cut tariffs on Indian goods to 18 percent. Under that interim agreement, Washington removed a 25 percent punitive tariff after India accepted a commitment to halt purchases of Russian oil, a move the United States characterized as reducing funds that support Russia’s invasion of Ukraine.
Gor said the agreement on oil is in place and emphasized India’s shift in crude sourcing. He was quoted as saying: "On the oil, there’s an agreement... We have seen India diversify on their oil. There is a commitment. This is not about India. The United States doesn’t want anyone buying Russian oil." He also said the U.S. expects India to increase purchases of U.S. oil and potentially buy Venezuelan crude.
Officials described the trade relationship as moving toward a final agreement. Gor indicated that a full trade deal will be signed "sooner than later," noting only "a few tweaking points" remain and that President Trump has received an invitation to visit India from Prime Minister Narendra Modi.
India’s trade minister, Piyush Goyal, said on Friday that the interim trade deal is scheduled to take effect in April and that the United States is likely to issue a formal notification this month to implement the tariff reduction to 18 percent.
The diplomatic push on oil follows sanctions imposed on Russia’s energy sector by the United States and its allies after Russia’s 2022 invasion. That dynamic previously led India to become a major buyer of Russian seaborne crude at deeply discounted prices.
Separate developments mentioned in reporting indicate the U.S. had proposed Venezuelan crude as an alternative to replace Russian imports. Licences were granted to trading houses Vitol and Trafigura to market and sell millions of barrels of Venezuelan oil after the reported capture of Venezuelan president Nicolas Maduro last month and a subsequent supply agreement with interim president Delcy Rodriguez.
Refining and marketing entities in India have reportedly ordered Venezuelan barrels. Those named include state-run Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum, along with private refiners Reliance Industries and HPCL-Mittal Energy.
Summary
The U.S. is negotiating sales of Venezuelan oil to India to help New Delhi reduce reliance on Russian crude. These efforts are linked to an interim U.S.-India trade arrangement that cuts U.S. tariffs on Indian goods to 18 percent, conditional on India diversifying its oil sources. Departments and ministries on both sides are in active discussions with officials hopeful of near-term announcements.
Key points
- The U.S. Department of Energy is engaging India’s Ministry of Energy on Venezuelan oil sales as part of diversification efforts.
- Washington has reduced tariffs on Indian goods to 18 percent under an interim trade deal contingent on India decreasing purchases of Russian crude; the interim deal is expected to take effect in April.
- State and private Indian refiners have reportedly placed orders for Venezuelan oil, and licences were granted to trading houses to market Venezuelan barrels.
Risks and uncertainties
- Timing and finalization of oil sales remain uncertain - discussions are ongoing and officials only indicated hope for announcements soon. This affects the energy and refining sectors.
- The interim trade agreement requires formal notifications and implementation steps, including U.S. tariff reduction, which could be delayed or adjusted - this impacts trade and export sectors.
- Geopolitical and sanction-related developments tied to Russia and Venezuela could influence the ability to execute planned oil transactions; this presents uncertainty for energy markets and commodity traders.