India’s oil import diversification strategy faces a fresh hurdle as the US threatens to impose a 25% “secondary tariff” on countries, including India and China, that import Venezuelan crude. The announcement, made by US President Donald Trump late Monday, is set to take effect from April 2 and will be in addition to any existing tariffs.
The move comes amid increasing geopolitical tensions, with Washington aiming to cut financial support to Venezuela’s government, which remains under US sanctions. India, one of the largest importers of Venezuelan crude, has been strategically sourcing oil from multiple regions to reduce dependence on the Middle East and manage fluctuating global prices. However, the proposed tariff could significantly impact India’s energy security and increase crude procurement costs.
Indian refiners, especially state-owned companies, have been key buyers of Venezuelan oil, which is often available at discounted rates. With this additional tariff, refiners may have to reconsider their sourcing strategy, potentially shifting towards costlier alternatives such as US or African crude.
Experts warn that the tariff could not only raise fuel prices domestically but also strain India-US trade relations. India has previously sought waivers on US sanctions for oil imports from Iran and Venezuela, citing its energy needs. However, Washington’s firm stance on isolating Venezuela could leave India with limited options.
As the April 2 deadline approaches, India is likely to engage in diplomatic negotiations to secure exemptions or explore alternative supply routes. The situation remains fluid, and the impact on global oil markets will depend on how India and other affected nations respond to Washington’s latest policy shift.
