Reliance Industries Ltd. has stopped buying oil from Venezuela after U.S. President Donald Trump approved a 25% tariff on countries purchasing crude from the South American nation. This decision comes as part of U.S. sanctions aimed at reducing Venezuela’s oil revenues.
Why Reliance Stopped Buying Venezuelan Oil
Reliance, one of India’s largest oil refiners, has been a key buyer of Venezuelan crude. However, the new U.S. tariff makes purchasing from Venezuela more expensive and riskier. As a result, the company has put further purchases on hold. A Reliance spokesperson has not yet commented on the decision.
Impact on Indian Refiners
Other Indian oil refiners have previously bought Venezuelan crude through intermediaries instead of directly from the country. However, Russian crude has been a more attractive option because it is cheaper and easier to obtain. Many Indian refiners, including Reliance, have already been buying oil from Russia, which offers favorable pricing compared to Venezuela.
China Remains Venezuela’s Biggest Buyer
Despite U.S. sanctions, China remains the largest buyer of Venezuelan crude. In February, China purchased more than 40% of Venezuela’s oil exports. The country’s private refiners, known for processing most of this oil, may temporarily pause purchases due to increased international scrutiny. However, experts believe the overall flow of sanctioned Venezuelan oil to China is unlikely to stop.
U.S. Pressure on Venezuela’s Oil Exports
The U.S. has been tightening restrictions on Venezuela’s oil industry to weaken its government’s revenue streams. The latest tariff is part of broader efforts to discourage international buyers from purchasing Venezuelan crude. This move affects global oil trade, forcing refiners to look for alternative sources of crude.
Reliance’s Future Oil Purchases
With Venezuelan crude becoming less viable, Reliance is expected to focus more on Russian oil and other suppliers. The company will likely assess the impact of the new tariff before making any long-term decisions about resuming purchases from Venezuela.
The decision by Reliance could influence other refiners and oil traders, as they may also look for alternative crude sources to avoid U.S. tariffs and potential sanctions.
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