Recent political and military developments in Venezuela are unlikely to have a significant near-term impact on global crude oil prices or on Indian companies given the country’s relatively small role in global oil supplies, Crisil Ratings said on Tuesday.According to news agency PTI, Crisil said in a note that even if the situation in Venezuela worsened and oil production was disrupted, the impact on international crude oil prices would be limited.
Venezuela only accounts for about 1.5 percent of global crude oil supply, limiting its ability to significantly influence prices.The assessment came after a U.S. military operation led to the capture of Venezuelan President Nicolas Maduro on drug charges in early January, sparking uncertainty in the oil-rich Latin American country. Although Venezuela has some of the largest proven crude oil reserves in the world, Venezuela’s current contribution to global supplies remains modest.Crisil noted that crude oil prices have remained largely stable in the last few days with Brent crude hovering just above $60 a barrel. It added that developments in Venezuela are not expected to have a material impact on India’s global trading position or the credit quality of Indian companies.India’s direct trade exposure to Venezuela is limited. Imports from the South American country account for less than 0.25 percent of India’s total imports. Of this, crude oil accounts for more than 90 per cent of the imports recorded in fiscal 2025 worth around Rs 14,000 crore, according to PTI. Venezuela supplies about 1 percent of India’s total crude oil needs.While India imports nearly 85 percent of its crude oil requirements and remains sensitive to global price movements, Crisil said the current situation in Venezuela is unlikely to impact oil prices in the near future. However, potential longer-term impacts have been highlighted if investment flows into Venezuela’s oil sector.“While we do not expect the situation in Venezuela to have a material impact on crude oil prices in the near term, investments to increase crude oil production in Venezuela, which has huge untapped reserves, could increase global oil supply and lead to a moderation in crude oil prices in the medium to long term, which could have a positive impact on India Inc,” Crisil said, according to PTI.India’s exports to Venezuela are also low, at less than Rs 2,000 crore in fiscal 2025, or less than 0.1 percent of total exports. These shipments are spread across sectors such as pharmaceuticals, ceramics, textiles and two-wheelers. Pharmaceutical exports stood at around Rs 900 billion, accounting for less than 0.5 percent of India’s total pharmaceutical exports, while other sectors recorded exports of Rs 80-120 billion each.Crisil said it does not expect a material impact on the credit profiles of Indian companies doing business with Venezuelan customers due to the limited scope of trading, but added that it will continue to closely monitor developments.Meanwhile, the US has indicated that it is actively working with Venezuela’s new leadership. President Donald Trump recently said Washington was working “really well” with Caracas, citing ongoing oil shipments to the United States.
