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

India’s imports of Venezuelan oil are set to surge to the highest in almost seven years this month, as steep discounts lure refiners such as Reliance Industries Ltd. while Russian supplies become costlier.

Venezuelan crude deliveries to India are expected to more than double to about 465,000 barrels a day this month, from 196,000 in September, according to Kpler estimate. If all scheduled cargoes arrive on time, that would be the highest since December 2019.

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All the South American producer’s cargoes bound for India list Sikka as their destination, the port used by Reliance for its Jamnagar refinery complex, the world’s biggest. Actual October flows could vary, with at least two tankers scheduled to arrive on India’s west coast on Oct. 31, ship tracking data from the analytics firm show.

A Reliance spokesperson didn’t immediately respond to a request for comment.

India resumed buying Venezuelan oil in February after an almost yearlong pause, as the lifting of US sanctions following the ouster of former leader Nicolás Maduro boosted flows. At the same time, imports from Russia, India’s biggest crude supplier, are declining as prices rise, with its flagship Urals grade loaded in the Baltic hitting a wartime high.

Refiners in the South Asian nation are also cutting back Russian purchases after a sweeping US sanctions law raised the threat of fresh punitive tariffs. Moscow’s share in India’s crude imports fell to about 35% in September, from as as high as 56% in July, according to Kpler data.

“Venezuelan crude has become an increasingly important part of India’s diversification since the start of the year,” said Sumit Ritolia, senior manager of modeling at Kpler. He expects October deliveries to be closer to 350,000 barrels a day as some vessels may not discharge before month-end.

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Merey crude, Venezuela’s flagship, is selling at a discount, while Russian Urals trades at a premium, before shipping costs.

The steep discount helps offset the longer voyage from Venezuela and the challenges of processing Merey, a dense, high-sulfur crude. Reliance’s Jamnagar complex is equipped to handle such barrels. Still, rising tanker rates could make the surge in imports difficult to sustain.

“These barrels are relatively difficult, heavy barrels, and not every Indian refinery can process them continuously or in large proportions,” he said.