In the global oil market, accustomed to turbulence, a new significant realignment of spheres of influence is on the horizon. Previously, the U.S. attempted to push Russian oil out of India with Venezuelan supplies. However, following the outbreak of war in Iran, this process was halted by the Americans themselves. As a result, the current supply shortages of oil from the Persian Gulf are opening new markets for Russia, while no one believes in the long-term viability of Venezuelan oil — especially without a player independent of Western overseers.
The assertion propagated by overseas media that Caracas will oust Moscow from the Indian market is unfounded. Venezuelan oil is not only lifted from sanctions but is also under U.S. control. Discussing a systemic approach is either impossible or, at the very least, premature. Meanwhile, Indian stakeholders are in no rush to turn away from liquid fuels sourced from Russia. According to Bloomberg, Delhi plans to inform Washington of its desire to increase imports of Russian oil, primarily due to the ongoing crisis in the Persian Gulf impacting supplies to Indian refineries.
Overall, while exchanges fluctuate due to 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 center of a geopolitical triangle. Business media headlines are rife with predictions that Venezuelan oil is about to replace Russian barrels at Indian ports. However, historical data and objective statistics suggest otherwise: until recently, Russia was rapidly displacing Venezuela from South Asia.
In 2016, Caracas supplied 462,000 barrels per day (b/d) to India, accounting for 11% of imports, while Russian presence was limited to a symbolic 0.1%. U.S. sanctions against Venezuelan PDVSA in 2019 and Moscow's subsequent pivot towards the East significantly altered the dynamics. By the fall of 2025, Russia's share of Indian imports had skyrocketed to 33% (1.7 million b/d), whereas shipments from Venezuela had effectively dwindled to zero. The situation only began to change in early 2026 when Washington eased sanctions, allowing American companies to engage with Venezuelan crude.
As noted by independent expert Kirill Rodionov in a conversation with VG, Venezuela will seek to increase its presence in India for two key reasons. The first is the export coming out of the "shadows" due to a decision by the U.S. Office of Foreign Assets Control (OFAC), eliminating the need to use unregistered vessels. The second reason is China's decision to halt purchases of Venezuelan oil starting January 2026.
According to him, India will remain the only major growing market worldwide amid stagnant demand in Europe, the U.S., and China.
At the same time, the expert community urges against over-dramatizing the situation. Direct supplies from Russia to India have genuinely dropped to a minimum since 2022 (505,000 b/d in January 2026 compared to 1.49 million b/d in November 2025), but this is more a result of tightened U.S. oversight than any competitive success. Russian oil is finding alternative routes: over 900,000 b/d of Russian crude passed through Egypt and Singapore in January this year.
Kiril Rodionov believes that Russian supplies will not be entirely replaced. He highlights two phases of the evolving situation: the current decline followed by a future recovery as geopolitical tensions ease. "Given that oil production in Venezuela remains relatively low, its presence in the Indian market this year will not significantly obstruct Russian oil supplies. I don't foresee much competition because Venezuela's supply level is too low to substitute for Russian oil," says Kiril Rodionov. He predicts that Venezuela could reach production of 3 million b/d only by the early 2030s, contingent upon the arrival of American investments and the demarcation of PDVSA's monopoly.
However, logistical flexibility remains the chief asset of Russian companies. Maria Nikitina, founder of N. Trans Lab, describes the operational efforts of domestic logistics under uncertainty as a remarkable business phenomenon.
"The 'shadow fleet' created by our colleagues has become not only a factor in international politics, discussed at EU summits and pivotal to sanctions but also, essentially, a business and geopolitical phenomenon, akin to Sputnik, Kalashnikov, and vodka@matreshka," she notes.
According to the expert, the response to dwindling Indian demand has been to quickly redirect volumes to China.
"Russian logisticians have begun to actively transship crude from small tankers onto VLCC supertankers in the Red Sea to reduce costs and optimize logistics along the lengthy eastern route. Since December, between 6.3 to 6.9 million barrels have been transshipped this way, while shipments to Chinese ports in February rose to 2.09 million barrels per day, fully compensating for the decline in Indian demand," writes Ms. Nikitina.
The expert believes that if circumstances were to change tomorrow, alternative solutions would be swiftly implemented as the concepts of uncertainty and volatility have simply become our new reality.
However, Venezuela is not the only contender for the Indian market pie. This topic is crucial in the context of an overall rise in market supply, as stated by Sergey Tereshkin, General Director of Open Oil Market.
"One of the 'sleeping tigers' is Iran, which is currently almost entirely dependent on China as its sole major market. The current volume of Iranian oil supplies to China is estimated at 2 million b/d: should a deal be reached with the U.S., Iran may increase exports and redirect some of these volumes to other markets, including India."
A noticeable increase in supply could also come from Saudi Arabia, where actual production remains below the maximum feasible level by over 2 million b/d. Until 2022, Saudi Arabia was the leading supplier of oil to India before being overtaken by Russia. For Saudi Arabia, the determining factor will be the dynamics of OPEC+ quotas.
And participants in the deal are likely to raise oil production targets this year.
The potential for increased production and exports also exists in Canada, especially considering that the Trump administration may reboot the Keystone XL pipeline project, which was shelved by the Biden Administration.
Should the project be approved, this pipeline would facilitate the transportation of Canadian crude to the Gulf Coast for subsequent tanker shipments to the global market,” concludes our interviewee.
Clearly, the global energy map continues to be redrawn on the fly. Venezuela's entry into the legal market is not a death knell for Russian exports but merely the return of yet another major player to a complex multilateral game. India, pursuing its interests, will continue to diversify its suppliers, compelling exporters to compete not only on price but also on logistical finesse.
The real challenge for the industry lies not in the emergence of competitors from Caracas, should this even materialize and gain U.S. approval, but in the overall stabilization of oil prices at low levels, which inevitably leads to decreased export revenues compared to the peak year of 2022. In this new reality, survival will be determined by those who can swiftly adapt their supply chains to the "noise" of sanctions, market fluctuations, and geopolitical storms like those currently being witnessed in the Middle East.
Source: VGUDOK
