India's state-owned Indian Oil Corporation Limited (IOCL) stands ready to process Venezuelan crude oil should it become available on global markets, according to Chairman A S Sahney. Speaking exclusively to ANI at the World Economic Forum (WEF) in Davos, Sahney emphasised the robustness of Indian refineries.

He recalled that IOCL has previously handled Venezuelan crude, dating back eight to ten years when supplies were more accessible. "Our refineries are varied and robust. They can process it in an admixed manner," Sahney stated, underscoring the technical capability of facilities like those at Paradip and Panipat.

This statement arrives amid dramatic geopolitical shifts in Venezuela. The United States recently captured former President Nicolas Maduro in a military operation, paving the way for an interim government. A landmark energy deal followed, committing to export 50 million barrels of Venezuelan oil—valued at USD 5.2 billion—to stabilise the nation's sector.

Sahney's optimism aligns with India's voracious energy demand. The country imports 85-87 per cent of its crude needs, making diverse sources critical. Venezuelan heavy crude, known for its high sulphur content, suits India's complex refining infrastructure designed for such feedstocks.

Global crude prices have stabilised in a favourable range of USD 60-65 per barrel over recent months. Sahney described this as an ideal zone, balancing economic growth with seller comfort. For much of the past six months, prices hovered at or below USD 60, easing import bills.

India's economy, growing at a phenomenal rate, attracts global business interest. "Everybody is interested in talking about doing business with India," Sahney noted, highlighting opportunities amid stable geopolitics and policy support.

Refining margins remain healthy despite fluctuations. Sahney clarified that these depend on international crack spreads—price differentials between crude and products like diesel and petrol—rather than crude costs alone. Current cracks have normalised but stay in a strong zone.

Government backing has been robust, with no policy hurdles impeding the sector. Sahney stressed that profitability now hinges on internal efficiencies: cost reductions, supply chain optimisation, and operational improvements.

IOCL's long-term vision spans the energy value chain. Investments will flow into downstream petrochemicals and cleaner alternatives, reflecting India's push towards sustainability. This diversification cushions against volatile crude markets.

The WEF's 56th Annual Meeting, themed "A Spirit of Dialogue," draws nearly 3,000 participants from over 130 countries. Running from 19 to 23 January 2026 in Davos-Klosters, it features world leaders, CEOs, and policymakers addressing global challenges.

Sahney's remarks signal India's pragmatic energy diplomacy. With US sanctions easing selectively on Venezuelan exports, New Delhi eyes renewed ties. Refineries like Reliance's Jamnagar have also processed this crude historically, amplifying national capacity.

Broader implications loom for global oil flows. Venezuela holds the world's largest proven reserves, mostly heavy oil. Stabilised exports could pressure OPEC dynamics and benefit import-dependent Asia.

For IOCL, this fits a strategy of feedstock flexibility. Admixture capabilities allow blending Venezuelan grades with lighter Middle Eastern crudes, maintaining product quality. Past experience mitigates risks like corrosion from high-acidity Venezuelan barrels.

India's refining sector processed over 5 million barrels per day in 2025, with capacity expansions underway. IOCL's 1.8 million bpd nameplate positions it as a heavyweight, exporting surpluses to Europe and Asia.

Stable prices aid fiscal planning. Lower imports bolster India's current account, freeing capital for infrastructure and defence—key priorities given regional tensions.

Sahney's Davos appearance underscores IOCL's global stature. As India targets net-zero by 2070, the firm balances fossil fuels with green hydrogen, biofuels, and EVs.

Venezuela's resurgence could reshape trade patterns. India previously imported 300,000 bpd pre-sanctions; revival might reclaim that volume at competitive discounts.

Challenges persist: logistics via the Caribbean, quality consistency, and US oversight of the deal. Yet Sahney's confidence reflects India's refining edge. This development bolsters energy security. Diverse suppliers reduce reliance on volatile Middle East routes, vulnerable to disruptions.

Based On ANI Report