Reliance drives India’s Venezuela oil imports to seven-year high

India's imports of Venezuelan oil are expected to reach their highest level in almost seven years this month, as discounted shipments from the South American country lure refiners like Reliance Industries Ltd. According to Kpler estimates, Venezuelan crude deliveries to India will more than double to about 465,000 barrels per day this month, up from 196,000 barrels in September.

If all scheduled cargoes arrive on time, this would be the highest since December 2019. The South American producer's cargoes destined for India are directed to the port of Sikka, where Reliance's Jamnagar refinery complex is located. Actual October flows might vary, with at least two tankers scheduled to arrive on India's west coast on October 31, based on ship tracking data.

Reliance declined to comment on the matter. India restarted buying Venezuelan oil in February following a year-long hiatus, as US sanctions were lifted after the ousting of former leader Nicolás Maduro, leading to increased flows. Meanwhile, imports from Russia, India's largest crude supplier, are decreasing as prices rise, with the Urals grade loaded in the Baltic reaching a wartime high.

Russian shares in India's crude imports fell to around 35% in September, down from a peak of 56% in July, according to Kpler data. Refiners in India are also reducing Russian purchases due to the threat of fresh punitive tariffs from a US sanctions law. Venezuelan crude has become an increasingly important part of India's crude diversification, according to Sumit Ritolia, a senior manager at Kpler.

He anticipates October deliveries to be around 350,000 barrels per day, as some vessels may not discharge before the end of the month. Heavy Merey crude, Venezuela's flagship, is being sold at a discount, while Russian Urals are trading at a premium, before accounting for shipping costs. Despite the steep discount, rising tanker rates could pose challenges to sustaining the surge in imports.