TLDR
- The United States issued a general licence to Reliance Industries, allowing direct purchases of Venezuelan oil without breaching sanctions.
- The move follows Washington’s easing of sanctions on Venezuela’s energy sector after internal political changes.
- General licence permissions include buying, exporting, selling, and refining extracted Venezuelan crude.
- Reliance had previously stopped Venezuelan oil imports due to sanctions but now could resume direct purchases.
- The licence supports Reliance’s efforts to diversify crude sources and reduce reliance on higher‑cost alternatives.
The United States has issued a general license allowing India’s Reliance Industries Ltd to purchase Venezuelan oil directly. This development follows the U.S. capture of Venezuelan President Nicolas Maduro. The decision could streamline Venezuela’s oil exports while benefiting Reliance’s refining operations.
U.S. Eases Sanctions to Facilitate Venezuelan Oil Purchases
According to a Reuters report, the U.S. has eased sanctions on Venezuela’s energy sector, aiming to support a $2 billion oil deal with Washington. The sanction relief also complements the broader goal of aiding Venezuela’s oil industry reconstruction.
A general license now authorizes companies to buy and refine Venezuelan oil, bypassing previous restrictions. Reliance Industries applied for the license in January. As one of the world’s largest oil refiners, it operates an advanced refining complex.
The license will allow Reliance to resume buying Venezuelan oil directly. This could expedite the company’s plans to replace Russian oil supplies.
Reliance’s Oil Strategy and the Role of Venezuelan Imports
Reliance recently bought 2 million barrels of Venezuelan oil from Vitol, a major trader. The company is expected to continue seeking discounted Venezuelan crude, replacing Russian oil in its refineries.
Reliance’s purchase marks a shift from the company’s earlier reliance on Russian oil amid geopolitical tensions. The U.S. has granted specific licenses to traders like Vitol and Trafigura, enabling them to sell Venezuelan oil.
These traders now have the authority to market large quantities of oil from Venezuela. This move aims to reduce Reliance’s dependence on more expensive crude, thus lowering costs for its refining operations.
The Strategic Shift in Global Oil Supply Chains
Reliance’s refineries, with a combined capacity of 1.4 million barrels per day, stand to benefit from the cheaper Venezuelan oil. The company had ceased buying Venezuelan crude in 2025 due to U.S. sanctions but will now be able to resume direct purchases.
This shift will allow Reliance to diversify its oil sources amid the changing global oil market. The general license granted by the U.S. marks a key step in this transition.
By securing access to discounted Venezuelan oil, Reliance can maintain its competitive edge. This development could further align India’s energy interests with U.S. strategic goals in the region.
