The global oil market, accustomed to turbulence, is entering a new phase of significant reallocation of influence. Previously, the United States attempted to push Russian oil out of India in favour of Venezuelan crude; however, the outbreak of war in Iran halted this process. As a result, the current supply shortages from the Persian Gulf are opening new markets for Russia, while the long-term prospects for Venezuelan oil are questionable, as there is no independent player designated by Western sponsors at this time.
Thus, the assertion made by some US media that Caracas will displace Moscow from the Indian market lacks credibility. Venezuelan oil is not only removed from sanctions but is also under US control. Speaking of a systematic approach is premature, if not impossible. Meanwhile, Indian buyers are not in a rush to turn away from Russian liquid fuels. According to Bloomberg, Delhi plans to inform Washington of its intent to increase imports of Russian oil. Naturally, this is all due to the ongoing crisis in the Persian Gulf, which has impacted supplies to Indian refineries.
Overall, as the markets are rattled by the consequences of the Middle Eastern crisis, India has emerged as a "safe haven" for Russia and a key market since 2022, once again finding itself at the centre of a geopolitical triangle. Business headlines are filled with forecasts that Venezuelan oil will soon replace Russian barrels at Indian ports. However, historical context and dry statistics tell a different story: until recently, Russia was rapidly displacing Venezuela from South Asia.
In 2016, Caracas exported 462,000 barrels per day (b/d) to India, constituting 11% of its imports, while Russian presence in the market was a mere 0.1%. US sanctions against Venezuelan PDVSA in 2019 and Moscow's subsequent pivot to the East dramatically altered the dynamics. By autumn 2025, Russia's share of Indian imports soared to 33% (1.7 million b/d), while supplies from Venezuela dwindled to virtually nothing. The situation only began to change in early 2026 when Washington eased sanctions, allowing American companies to operate with Venezuelan crude.
As noted in a conversation with VG, independent expert Kirill Rodionov mentions that Venezuela is set to increase its presence in India for two key reasons. First, exports are emerging from the "shadows" thanks to a decision by the US Office of Foreign Assets Control (OFAC), which eliminates the need for an unregistered fleet outside the OECD. The second reason is China's stance, which ceased purchases of Venezuelan oil in January 2026.
"Since China is stepping away from Venezuelan oil supplies, Caracas needs a new market, and India fits that bill," our interlocutor emphasises.
According to him, India will remain the only major growing market in the world amid stagnant demand in Europe, the USA, and China.
At the same time, the expert community urges against dramatizing the situation. Direct supplies from Russia to India have indeed fallen to a minimum since 2022 (505,000 b/d in January 2026 compared to 1.49 million b/d in November 2025), but this appears to be more a consequence of tightening US controls than a success for competitors. Russian oil is finding its way around obstacles: over 900,000 b/d of Russian crude passed through Egypt and Singapore in January this year.
Kirill Rodionov believes that Russian supplies will not be entirely replaced. He highlights two phases in the development of the situation: the current decline followed by a future rise as geopolitical resolutions unfold. "Given that oil production in Venezuela is relatively low, its presence in the Indian market this year will not seriously hinder Russian oil supplies. I do not expect significant competition because the supply level in Venezuela is too low to replace Russian oil," Rodionov states. He predicts that Venezuela might reach a production level of 3 million b/d only by the early 2030s, contingent upon American investments and the demopolisation of PDVSA.
However, logistical flexibility remains the main asset for Russian companies. Maria Nikitina, founder of N. Trans Lab, describes the operations of domestic logistics in uncertain conditions as a true business phenomenon.
"The 'shadow fleet' created by our colleagues has become not only a factor in international politics, a topic of discussion at EU summits, and a key point of sanctions, but essentially a business and geopolitical phenomenon, with a name that is now synonymous with Sputnik, Kalashnikov, and vodka@matreshka,” she notes.
According to the expert, the response to decreasing demand from India has been the rapid redirection of volumes to China.
"Russian logistics have begun actively transferring crude from smaller tankers to VLCC supertankers in the Red Sea area to cut costs and optimise logistics for the long eastern route. Since December, between 6.3 and 6.9 million barrels have been transhipped in this manner, and supplies to Chinese ports in February surged to 2.09 million barrels per day, fully compensating for the decline in Indian demand," Ms Nikitina reports.
The expert believes that if circumstances change tomorrow, we will quickly find alternative solutions, because for us, the terms uncertainty and volatility have simply become a new reality.
However, Venezuela is not the only contender for the Indian market. This topic is important in the context of the overall increase in supply in the market, as Sergey Tereshkin, General Director of Open Oil Market, explained to VG.
"One of the 'sleeping tigers' is Iran, which is currently almost entirely dependent on China — its only significant sales market. Current estimates place Iranian oil shipments to China at 2 million barrels per day (b/d): should a deal with the USA occur, Iran will ramp up exports and redirect some volumes to other markets, including India.
A notable increase in supply could also come from Saudi Arabia, where actual production levels remain below the maximum possible level by over 2 million b/d. Until 2022, Saudi Arabia was a leading oil supplier to India, until it was replaced by Russia in this role. In the case of Saudi Arabia, the decisive factor will be OPEC+ quota dynamics.
The participants in the deal are likely to raise production targets this year.
Canada also has potential for increased production and exports, especially considering that the Trump administration may restart the Keystone XL pipeline project, which was put on hold by the Biden administration.
If the project is approved, the pipeline will facilitate the transportation of Canadian crude to the Gulf Coast for further shipments to the global market," our source concludes.
It is evident that the global energy map continues to be redrawn in real-time. Venezuela's entry into the legal market is not a death knell for Russian exports, but merely the re-emergence of another significant player in a complex, multifaceted game. India, pursuing its interests, will continue to diversify supplies, forcing exporters to compete not only on price but also on logistical sophistication.
The real challenge for the industry is not the emergence of competitors from Caracas, if such an eventuality occurs and is sanctioned by the US, but in the general stabilisation of oil prices at low levels, which will inevitably lead to a decrease in export revenues compared to the peak year of 2022. In this new reality, survival will belong to those who can rapidly adapt their supply chains to the "noise" of sanctions, market fluctuations, and geopolitical storms like the one we are currently witnessing in the Middle East.
Source: Vgudok
