Venezuela surprise rocks oil dynamics

Risks from oil volatility; hopes of stability, investment safety

- Rituraj Baruah & Dhirendra Kumar

The American intervention in Venezuela has posed a wild card for New Delhi, which has significant energy investments and millions of dollars in unpaid dividends stuck in the South American country.

While a potential easing of sanctions after the US intervention could eventually restore India's access to the world's largest oil reserves and $600 million in unpaid dividends, experts warn that immediate market volatility, infrastructure decay, and Venezuelan hyperinflation pose risks to its energy security and import bill. India’s state-run companies had invested $2.5 billion in Venezuela before it came under stiff US sanctions in 2020.

India used to be a major buyer of Venezuelan heavy crude, importing more than 400,000 barrels per day at peak levels, until the US sanctioned the country to curb what it calls narco-terrorism. India on Sunday expressed "deep concern" over the developments in Venezuela, reaffirming its support for the well-being and safety of the Venezuelan people.

The turn of events in Caracas will determine the fate of India's multi-billion dollar investments and hefty dividends.