Trump Threatens 25% Tariff on Countries Buying Venezuelan Oil: What It Means for India’s Energy Imports

Donald Trump has threatened to impose a 25% tariff on countries, including India and China, that import Venezuelan oil, effective April 2. The tariff would be in addition to any existing tariffs and is a response to Venezuela’s hostility towards the US. India resumed importing Venezuelan oil in late 2023 after a three-year gap, following a temporary easing of US sanctions. Despite the reinstatement of sanctions, some Venezuelan oil continues to reach India through specific exemptions. India currently imports 65,000–93,000 barrels of Venezuelan oil daily, a small portion of its total oil imports.

With India’s oil dependency increasing and consumption projected to rise, the tariff could result in higher oil prices, impacting the country’s import costs. The Indian government has indicated that it is willing to purchase Venezuelan oil if the pricing is favorable and the oil is not under sanctions. This situation arises as a US trade delegation is set to visit India to discuss trade and investment issues, including tariffs. Crude oil remains India’s largest import by value, and its consumption is expected to grow due to rising domestic demand.

Trump Threatens 25% Tariff on Countries Buying Venezuelan Oil: What It Means for India’s Energy Imports

Former US President Donald Trump recently announced a possible 25% tariff on countries such as India and China if they continue purchasing oil from Venezuela. This additional tax, set to begin on April 2, would be imposed on top of existing tariffs already in place. Trump claimed the move is a reaction to Venezuela’s strained relationship with the US.

India’s Renewed Oil Purchases from Venezuela

India began buying Venezuelan oil again in late 2023 after a three-year gap. This was made possible when the US temporarily relaxed sanctions (economic penalties) against Venezuela. Although the sanctions were later reinstated, limited shipments of Venezuelan oil still reach India through special US-approved exemptions. Currently, India imports around 65,000 to 93,000 barrels of Venezuelan crude oil daily. While this volume may seem significant, it represents only a small fraction of India’s total oil imports, which exceed 4.5 million barrels per day.

Why the Tariff Worries India

India is the world’s third-largest consumer of oil, and its reliance on foreign oil is growing. Domestic demand is expected to keep rising, meaning imports will likely increase as well. If the US imposes the 25% tariff, it could raise the cost of Venezuelan oil for India. Even though Venezuela supplies only a small share of India’s oil, the tariff could set a precedent, potentially affecting global oil prices or trade terms. Higher costs could strain India’s economy, which already spends heavily on oil imports.

The Indian government has clarified that it will continue to buy Venezuelan oil only if it remains affordable and legally permitted. “We follow all international sanctions but will prioritize our energy needs and pricing,” officials stated. This suggests India may reduce its Venezuelan oil imports if the tariff makes them too expensive or if sanctions tighten further.

US-India Trade Talks Ahead

The timing of Trump’s tariff threat is notable. A US trade delegation is scheduled to visit India soon to discuss ongoing issues, including tariffs, investments, and trade agreements. Oil imports—especially from sanctioned countries—could be a key topic. India is likely to argue that its Venezuelan oil purchases are minimal and lawful under current exemptions.

Bigger Picture: India’s Oil Dependency

Crude oil is India’s most expensive import, critical for transportation, industries, and households. With consumption projected to climb, securing affordable oil is vital. While India buys most of its oil from the Middle East, Russia, and the US, Venezuelan oil offers a cheaper alternative when available. However, geopolitical tensions—like US-Venezuela hostility—add uncertainty.

What Happens Next?

If the 25% tariff takes effect, India faces tough choices:

1. Absorb Higher Costs: Pay more for Venezuelan oil, which could affect fuel prices and inflation.
2. Reduce Imports: Cut back on Venezuelan oil, relying more on other suppliers like Russia or Saudi Arabia.
3. Negotiate with the US: Use trade talks to seek exemptions or compromises.

For now, India seems focused on balancing its energy needs with global politics. The government has not yet reacted strongly to Trump’s warning, possibly waiting to see if the tariff becomes official or is merely a bargaining chip in upcoming discussions.

Conclusion

The proposed US tariff highlights how global politics can disrupt trade. For India, the priority remains securing affordable oil to support its growing economy. While Venezuelan imports are minor, the threat of tariffs adds pressure as India navigates sanctions, rising demand, and diplomatic relations. The upcoming US-India talks may determine whether this tariff becomes a real challenge or fades as a temporary warning.