The Venezuela Crisis
The U.S strikes on Venezuela and the ongoing crisis there are unlikely to significantly influence India’s energy security as India is heavily insulated from this shock. One of the main reasons India is unlikely to be heavily affected is the sharp decline in trade between the two countries over the past few years. The data cited by the Global Trade Research Initiative (GTRI) shows that India’s total imports from Venezuela in 2024–25 stood at only about USD 364.5 million. Out of this, crude oil imports accounted for roughly USD 255.3 million. This was a steep drop of over 80% compared to the previous year, when India imported crude worth around USD 1.4 billion from Venezuela. India’s exports to Venezuela are also quite small. In 2024–25, exports were valued at about USD 95.3 million, with pharmaceuticals forming the largest share. These modest numbers clearly indicate that Venezuela does not play a major role in India’s trade ecosystem today. The data from the Ministry of Commerce and Industry also reveals that India imported $255.3 million worth of oil from Venezuela in the current financial year up to November 2025, about 0.3% of its total oil import during this period.
India was a major buyer of Venezuelan crude back in 2000s and 2010 like Indian firms such as ONGC Videsh held upstream stakes in the Orinoco belt. However, this bilateral engagement has weakened sharply since 2019 as India has been cutting its oil imports and commercial engagements with Venezuela in response to U.S. sanctions and threats of secondary sanctions, low trade volumes and large geographical distance.
According to OPEC data, Venezuela accounts for about 3.5% of the OPEC’s total oil exports, and about 1% of global oil supplies. This relatively low supply is due to the U.S. sanctions on Venezuela and the heavy nature of Venezuelan oil, which requires special refineries that most countries do not have and due to which most of Venezuela’s oil supply goes to China. However, even without direct supply dependence, any geopolitical crisis involving oil-producing regions can push up global crude prices through risk premiums. Since India imports more than four-fifths of its crude oil requirement, higher global prices can raise the import bill, affect inflation and exert indirect pressure on the rupee.
The Indian rupee has faced pressure spell amid heightened global risk aversion following developments in Venezuela. In uncertain geopolitical conditions, investors typically move towards the US dollar, which is weighing heavily and dragging down emerging market currencies. The impact on the rupee so far appears driven more by sentiment than by any direct trade or financial linkage with Venezuela. But this impact on Indian rupee is largely seen by analysts short term and volatility driven rather than structural. Unless the crisis results in a sustained rise in crude oil prices or prolonged global risk aversion, the rupee’s movement is expected to remain within a managed range, supported by India’s macro fundamentals and central bank surveillance.
However, Indian equity markets largely shrugged off risks linked to US strikes on Venezuela over the New Year’s weekend, with benchmarks trading marginally higher as investors focused on domestic interest-rate sensitivities rather than geopolitical headlines. The Nifty edged up slightly, with technology stocks down about 1 to 2%, while banking and auto stocks gained 1 to 2%. Most other sectors traded in a narrow band, reflecting a market that viewed the Venezuela developments as a risk-premium event rather than a trigger for a sustained macro shock. Market participants said Indian equities were diverging from the broader Asian rally, where AI- and technology-heavy markets posted sharper gains on expectations of eventual US Federal Reserve rate cuts. In India, the dominant driver was optimism around rate-sensitive sectors, particularly banks and autos. Given that the Venezuelan situation is unlikely to trigger a rapid change in oil supply or inflation dynamics, investors remained anchored to domestic interest-rate expectations. The absence of any immediate oil-price response helped keep inflation assumptions stable, allowing rate-sensitive sectors such as banks and autos to remain the primary drivers of Indian equity performance.
The corporate exposure also remains limited. India’s direct exposure to Venezuela remains modest. Companies with links include ONGC Videsh, Indian Oil, Oil India, Reliance Industries, Nayara Energy and MRPL, largely through minority stakes or historical import relationships. Sun Pharma and Glenmark Pharma operate locally, while Jindal Steel & Power manages iron-ore operations. As per, analysts these linkages are fragmented and not revenue-critical, limiting direct equity-market fallout. Gold is already off to a spectacular 2025, and this conflict gives it new momentum because whenever the geopolitical uncertainty spikes investors migrate their capital to safe haven assets. Analysts are expecting a gap-up opening in Gold with COMEX gold potentially reaching $4,380 per ounce and the precious bullion may touch $4,380 per ounce. In India, MCX Gold could get closer to the mark of Rs. 1,40,000 per 10 grams. Venezuela has the largest gold reserves (161 metric tonnes) in South America. Control over these assets by US-backed forces could change long-term global supply dynamics, but the immediate reaction is purely risk-off buying. While silver could be more volatile than gold, it is likely that silver can potentially move towards the $75-$78 range on COMEX, while on MCX, the silver prices could reach the levels of Rs 2,45,000 per kg. Concerns over shipping routes used by Peru and Chad silver exporters could further tighten the immediate supply.
The crisis in Venezuela is a major geopolitical event with global ramifications, but the direct impact on Indian markets appears to be limited due to minimal economic linkages between the two countries. While short-term volatility is inevitable, especially in commodities, currency markets, and sentiment-driven sectors, the structural drivers of India’s economy are expected to remain stable.
Zubair Mushtaq, Research Scholar in Department of Commerce, Kashmir University
