US–Venezuela Conflict: What It Could Mean For Crude Oil Prices And India’s Economy

US action against Venezuela has put crude oil markets on alert, with potential ripple effects for India’s economy.

US–Venezuela Conflict: The conflict between the United States of America and Venezuela has escalated after the former’s military raided and captured the latter’s President, Nicolas Maduro, and his wife.

US President Donald Trump said that Venezuela’s President Nicolas Maduro and his wife, Cilia Flores, who were captured in Caracas during a US military operation on January 03, have been indicted on charges of alleged “drug trafficking and narco-terrorism conspiracies” in the Southern District of New York, and will face trial.

Trump said that Maduro and his wife “will soon face the full might of American justice and stand trial on American soil”. According to an unsealed indictment shared by Attorney General Pamela Bondi on X, Maduro and Flores face multiple counts of statutory allegations related to “drug trafficking and narco-terrorism conspiracies”.

A plane carrying Maduro landed near New York City on Saturday night, and he was helicoptered to the city before being taken by a large convoy to the Metropolitan Detention Center in Brooklyn under a heavy police guard.

Venezuela’s Supreme Court ordered Vice President Delcy Rodriguez to assume the powers and duties of acting president after the US removed Nicolas Maduro, CNN reported.

With a sudden geopolitical turmoil and being a major oil supplier country, there are concerns regarding the spike in crude oil prices, which could have an impact on the Indian economy.

Will the US-Venezuela Crisis Have an Impact On India?

Global Trade Research Initiative (GTRI), in a note, said that India is unlikely to be affected by the ongoing crisis in Venezuela in terms of material economy or energy.

The trade body said that India has been reducing crude shipments from Venezuela in recent years. It added that since 2019, when US sanctions took effect, the country reduced imports and commercial activity, and curbed trade from the South American nation.

In 2024–25, India’s imports from Venezuela declined sharply to $364.5 million, with crude oil accounting for $255.3 million of the total. This represented a steep 81.3 percent fall from imports worth $1.4 billion in 2023–24.

India’s exports to Venezuela remained modest at $95.3 million during the year, led by pharmaceutical shipments valued at $41.4 million.

Given the limited trade exposure, ongoing sanctions and the significant geographical distance, the Global Trade Research Initiative (GTRI) said the latest developments in Venezuela are unlikely to have any material impact on India’s economy or its energy security.

India May Benefit If Sanctions Ease

India is expected to re-emerge as a key buyer if Venezuelan supplies return. “If sanctions are eased… trade flows can resume rapidly,” said Kpler analyst Nikhil Dubey, noting that Indian refineries are technically well suited to process Venezuelan heavy crude, as quoted by PTI.

Crude Oil Prices May Jump In Near Future

Crude oil prices is likely to see a gap-up opening when the market opens on Monday, January 5, according to market experts told LiveMint.

“The US attack on Venezuela is expected to trigger geopolitical tension in the region, which is expected to fuel the uncertainty. Hence, I expect a gap-up opening for gold, silver, copper, crude oil, gasoline, and other commodities,” said Anuj Gupta, Director of Ya Wealth.