US Control of Venezuelan Oil May Boost Margins for Indian Refineries: Report

New Delhi: The US capture of Venezuela’s President Nicholas Maduro and a potential takeover of the country’s oil assets could benefit Indian refineries by opening access to heavier Venezuelan crude, which typically trades at a discount to Brent and helps improve refining margins, according to a report released on Monday.

A report by Choice Institutional Equities noted that India had earlier imported up to 400 thousand barrels per day (KBD) of Venezuelan crude. With US control and renewed investments, upstream Indian players could also gain access to equipment and opportunities to enhance output from Venezuelan fields such as San Cristobal and Carabobo-1.

The brokerage projected Brent crude prices to average around $61.5 per barrel in calendar year 2026, with limited additional supply entering global markets this year. However, fresh Venezuelan output could put downward pressure on prices from next year onward.

The report highlighted that heavier Venezuelan barrels could favour complex refineries, particularly in India and China, while accelerating the rationing of simpler refineries globally. As more complex plants come online, this shift could improve refining cracks over the medium term.

Despite the potential upside, a sharp increase in Venezuelan oil production is expected to be limited in the near term due to years of underinvestment by state-owned oil firm PDVSA. In a best-case scenario, production could rise by about 150 KBD in 2026 through operational spending, while larger gains would require substantial capital investment.

According to the report, US authorities captured President Maduro on January 3, 2026, and flew him to the United States to face charges including narco-terrorism conspiracy and cocaine importation conspiracy. Following this, US President Donald Trump announced that American oil companies would invest an unspecified amount to revive Venezuela’s oil infrastructure and boost output, enabling higher crude flows to the US and other global markets.

Venezuela, which holds the world’s largest proven oil reserves of around 303 billion barrels, produced approximately 0.9 million barrels per day in November 2025, sharply lower than about 2 million barrels per day recorded in the early 2010s.