- Powerful Venezuela earthquakes raise India’s crude oil import concerns.
- Port damage, shipping delays could increase India’s oil costs.
- India’s ONGC investments, oil diversification face new risks.
The powerful earthquakes that struck Venezuela this week have triggered concerns over the country’s crude oil exports, with experts warning that any prolonged disruption could affect India’s oil imports and increase shipping costs.
On June 24, Venezuela was hit by two earthquakes measuring 7.2 and 7.5 in magnitude within seconds of each other. The quakes, described as the strongest to hit the country in 125 years, have resulted in hundreds of deaths and thousands of injuries. Aftershocks continue to be reported in the affected region.
The development comes at a time when India has been working to stabilise its crude oil supplies following recent disruptions linked to the conflict involving Iran. While the peace agreement between the US and Iran had raised expectations of smoother shipments through the Strait of Hormuz, the situation in Venezuela has emerged as another potential challenge for oil imports.
Venezuela’s Growing Role In India’s Oil Imports
India sharply increased its purchases of Venezuelan crude during April and May as uncertainty in the West Asia encouraged refiners to diversify their sourcing. This made Venezuela one of India’s key crude oil suppliers during the period.
Experts said the risks extend beyond damage to oil production facilities. Even if export terminals remain operational, power outages, damaged transport networks and restrictions at ports could delay shipments for several days or even weeks.
La Guaira, one of Venezuela’s major cargo ports, has been declared a disaster zone, raising concerns over port operations and shipping schedules.
Longer waiting times for vessels could increase demurrage charges, while rerouting and delays may add to overall transportation costs. These additional expenses are expected to affect traders, refiners and insurance companies.
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ONGC Videsh Investments Could Also Be Affected
Apart from crude oil imports, India also has investments in Venezuela’s energy sector through state-owned ONGC Videsh. Any prolonged disruption to production or exports could affect the company’s operational and economic interests.
Earlier this month, Prime Minister Narendra Modi held discussions with Venezuela’s acting President Delcy Rodriguez on expanding cooperation in sectors including mining, critical minerals, pharmaceuticals and automobiles. However, the earthquake may delay or alter some of these plans.
Experts Urge Close Monitoring
Experts said India’s decision to source more crude from Venezuela helped diversify supplies away from the West Asia, but also exposed the country to a different set of risks.
Shipping companies, energy traders and insurance firms are expected to closely monitor the situation as authorities assess the full extent of the damage. For India, the developments in Venezuela have added fresh uncertainty to an increasingly important crude oil supply route.
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