According to a Financial Times report, Trump told reporters that the 25 per cent tariff on buyers of Venezuelan crude would be in addition to any existing levies. As per the executive order published on Monday evening, once applied, the tariffs would remain in place for one year “after the last date on which the country imported Venezuelan oil,” unless the US commerce secretary approved their earlier removal, the FT report said.

India resumed crude oil imports from Venezuela in December 2023, nearly three years after the US eased sanctions on the South American nation, becoming the largest buyer of Venezuelan crude, according to shipping fixtures and tracking data. The key buyers were private-sector refiners Reliance Industries Ltd (RIL) and Nayara Energy (NEL).

Crude oil dispatches from Venezuela to India in December totalled almost 191,600 barrels per day (bpd), rising to over 254,000 bpd in January—nearly half of Venezuela’s total oil exports of approximately 557,000 bpd for the month, according to data from commodity market analytics firm Kpler. The data showed that Venezuela last dispatched crude oil to India in September 2020, with the last deliveries arriving at Indian ports in November that year.

The fresh tariff threat is particularly significant as India’s oil dependency continues to rise and is on course to surpass the record levels of the last financial year. According to the latest data from the oil ministry’s Petroleum Planning & Analysis Cell (PPAC), India’s oil import dependency stood at 88.2 per cent in April–February, up from 87.7 per cent in the corresponding period of FY24. Restrictions on Venezuelan crude could be a global supply constraint, which could translate into a hardening of prices in the oil market. That could be bad news for net importers of crude, including India.

Petroleum Minister Hardeep Singh Puri has long maintained that India is willing to buy Venezuelan oil if the economics are favourable. Given the volatility in global oil markets over the past two years, the government has reiterated its stance that India will source cheaper oil from available suppliers. As the world’s third-largest consumer of crude oil, India relies on imports for over 85 per cent of its requirements.

Notably, the fresh tariff concerns arise just as a high-level US delegation, including Assistant US Trade Representative for South and Central Asia Brendan Lynch, is set to begin a four-day visit to India starting Tuesday.

Signalling a broad-based discussion, the US Embassy stated on Monday that “trade” and “investment” would be key topics during the bilateral talks. India’s trade agreements, particularly with developed nations, are increasingly structured around investment commitments in exchange for tariff reductions.

Crude oil remains India’s largest import by value, and consumption is expected to rise further due to increasing domestic demand. According to PPAC projections, petroleum product consumption is forecast to grow by 4.7 per cent in FY26, reaching 252.93 million tonnes. If these projections hold, India’s fuel and petroleum product consumption in FY26 will hit yet another record.

Unlike many other countries, India is seen as a major growth hub for oil demand, given its future consumption potential and currently low per capita energy use. In fact, India is among the few markets where refining capacity is expected to expand significantly in the coming years. The country’s current refining capacity stands at nearly 257 million tonnes per annum.