Reliance secures U.S. license to import Venezuelan oil, boosting refining margins

Billionaire Mukesh Ambani’s Reliance Industries Limited has received a U.S. general license to purchase Venezuelan crude oil directly, enabling India’s largest private refiner to resume imports of discounted heavy feedstock that aligns with its Jamnagar refinery configuration and optimises refining margins.

Reliance, which operates the world’s largest single-site refining complex at Gujarat’s Jamnagar, was among international companies which in late January got a general license from the U.S. for buying Venezuelan oil directly without violating sanctions, sources aware of the matter said.

Since capturing Venezuelan President Nicolas Maduro last month, the U.S. has eased sanctions on the South American nation’s energy industry to resume the flow of oil from the country that holds the world’s largest reserves.

Reliance did not respond to requests for comments.

So far, the U.S. has permitted the sale of Venezuelan oil through traders, but now a general license will give authorisation to purchase of oil directly from an entity that has already extracted it from below ground or is in possession of it.

Reliance was a regular buyer of Venezuelan crude before the U.S. slapped sanctions on Nicolas Maduro’s regime in 2019-20. It bought oil when the U.S. introduced a temporary sanctions relief in 2024. And when Venezuelan oil started flowing again through traders this year, it bought 2 million barrels from Vitol.

The window was also utilised by state-owned Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd (HPCL), who have jointly bought 2 million barrels (1.5 million barrels for IOC’s Paradip refinery in Odisha and rest 5,00,000 barrels for HPCL’s Visakhapatnam unit in Andhra Pradesh).

Prior to sanctions, IOC too was a regular buyer of Venezuelan crude.

U.S. President Donald Trump last week said Prime Minister Narendra Modi had agreed to stop buying Russian oil and purchase more oil from the U.S., and possibly Venezuela, following a key U.S. trade deal with India. That agreement has led to the U.S. dropping punitive 25% tariffs imposed on Indian goods for the import of Russian oil.

Sources said tapping Venezuela is also part of India’s efforts to diversify its crude sources. This comes at a time when imports from Russia are set to fall.

Venezuela’s crude grades, especially from the Orinoco Belt, are predominantly heavy and extra-heavy. Reliance’s Jamnagar refineries are among the world’s most complex and geared toward efficiently processing heavy, sour crudes, which trade at a deep discount to international benchmarks due to production challenges and logistical constraints.

Buying Venezuelan oil will allow Reliance to optimise its refining margins because these barrels can be upgraded into higher-value products like diesel, kerosene and LPG that fetch strong demand in India and export markets.

Also, Reliance’s business model is built on integrated refining-petrochemical operations. Heavy crude with high residual content can be broken down into valuable petrochemical feedstocks. Access to cheaper Venezuelan heavy crude supports better petchem margins when converted into polymers and speciality chemicals.