India can save almost $3 billion just by stepping up its crude import game! A recent report by SBI stated that by replacing a portion of Russian supplies with Venezuelan heavy crude and updating its import strategy, India can get several cost advantages. The assessment notes that New Delhi could lock in notable savings by scaling back reliance on Russian oil and increasing purchases of Venezuelan heavy crude, despite the additional costs linked to logistics and other related factors.SBI Research said a discount of $10–12 per barrel on Venezuelan heavy crude would be enough to make the switch commercially viable for Indian importers. “India’s fuel import bill could even decline by $3bn in the event of shifting to Venezuela…discount of $10-12 could make the choice agnostic,” the report stated.At present, Venezuelan heavy crude is priced at around USD $51 per barrel, as per Oil Price data cited in the report. The researchers noted that the economics of replacing Russian crude hinge on multiple cost variables, including the discount relative to Brent crude, shipping duration, insurance charges and overall logistics.
However, the report highlighted one key challenge, Venezuela’s distance from India. Shipping routes from Venezuela are estimated to be nearly five times longer than those from the Middle East and about twice as long as routes from Russia, pushing up the landed cost of crude. In addition, the ability of Indian refineries to process heavier grades and any technology-related costs associated with blending were flagged as critical considerations.To evaluate the potential impact, SBI Research modeled a “brute force scenario” that retained historical trends in India’s crude import basket. Under this scenario, Russian crude imports are reduced to zero and fully substituted with Venezuelan supplies. The outcome suggests that, under favorable pricing conditions, India’s fuel import bill could fall by roughly $3 billion per year.The analysts, however, cautioned that the current pricing advantage may not be permanent. Any easing of hostilities in Ukraine could compress the deep discounts currently available on Russian crude, reducing the relative attractiveness of Venezuelan barrels. Even so, the report maintained that a USD 10–12 per barrel discount would keep the choice between suppliers economically neutral for Indian buyers.SBI Research also stressed that India’s crude import mix is unlikely to shift through a single, uniform adjustment. Instead, the transition will involve multiple combinations of Russian, Venezuelan, Middle Eastern and other crude grades, with the final blend shaped by market conditions, logistical costs and refining capabilities.Projections included in the report show that Venezuelan crude could account for a significant share of India’s imports under certain scenarios, while Russian volumes decline sharply. The analysis underscores that while Venezuelan heavy crude offers potential cost benefits, India’s import strategy will continue to evolve based on pricing dynamics and operational constraints.
