The commercial case for closer cooperation is real, but so are the risks. India imported $3.59 billion worth of Venezuelan crude between April and August 2026, while its purchases of Russian oil declined in August and imports from the United States increased. Diversification is already underway. The question is whether Rubio’s October 20 proposal creates additional value for Indian companies and consumers, or asks them to assume fresh costs and risks to advance Washington’s energy and geopolitical priorities.

A report by the Global Trade Research Initiative (GTRI), authored by Ajay Srivastava, argues that India must distinguish between “three separate decisions”: importing more Venezuelan crude, investing in Venezuela’s damaged oil infrastructure and moving away from Russian supplies. Each has a different commercial rationale, capital requirement and exposure to policy changes.

That distinction should guide the response. India does not need to choose between American, Russian and Venezuelan oil. It needs to make a wider range of supply relationships commercially worthwhile, while preserving the flexibility to shift purchases when prices, refining margins or geopolitical risks change.

Diversification is already happening

India’s Venezuelan crude imports rose from $255 million in fiscal 2025-26 to $3.6 billion in just five months, from April through August 2026, according to GTRI. Reliance Industries accounted for 74.3 percent of those purchases, explaining Washington’s focus on the company and its Jamnagar refining complex.

Reliance’s Special Economic Zone refinery at Jamnagar accounted for $1.70 billion, or 47.3 percent, of India’s Venezuelan crude imports during the period. Sikka accounted for another $968.2 million, or 27 percent. Indian Oil Corporation’s Paradip facility received $421.3 million, while Mundra terminals operated by Hindustan Petroleum Corporation and others accounted for $405.8 million. Nayara Energy’s Vadinar refinery accounted for $95 million.

The figures show that Venezuelan crude is not a hypothetical addition to India’s supply portfolio. Indian refiners are already buying it at scale, with Reliance accounting for nearly three-quarters of the total.

Purchases from the United States have also increased, from $405 million in July to $790 million in August, GTRI said. Russian crude imports, meanwhile, fell from $7.3 billion in July to $5.4 billion in August, a decline of about 25 percent. Russia’s share of India’s crude imports fell from a peak of 51 percent in July to 45 percent in August.

These shifts suggest that Indian refiners are adjusting their sourcing. They do not, by themselves, establish that a particular diplomatic intervention caused the changes, nor do they demonstrate that India can or should sustain a predetermined reduction in Russian purchases regardless of price.

For a country that imports more than 85 percent of the crude it consumes, supplier diversification is a means of managing costs and disruption. It is not an end in itself. If replacing discounted Russian barrels with more expensive alternatives raises import costs, the burden can ultimately reach refiners, fuel consumers and the broader economy.

A discount is not the whole calculation

Venezuelan crude offers an obvious attraction for Indian refiners equipped to process heavy grades: its lower purchase price can create an opportunity to improve margins. But the discount must be assessed against the full cost of delivering and processing the oil.

During April-August 2026, India paid an average of $612 per tonne for Venezuelan crude, compared with $821 per tonne for Saudi Arabian crude, according to GTRI. The difference of $209 per tonne is substantial. Yet the two grades are not interchangeable, and their headline prices do not provide a like-for-like measure of profitability.

Much of Venezuela’s crude is extra-heavy, with a thick consistency that can require diluents, specialized transport, upgrading facilities and more demanding refinery processes. Its lower price reflects, in part, its quality and the costs associated with handling it. The relevant measure for a refiner is the value of the products recovered from each barrel after accounting for freight, processing, energy use and other expenses.

India has a competitive advantage here. Reliance’s Jamnagar complex has substantial capacity to process heavy and lower-quality crude. Nayara’s Vadinar refinery and suitable Indian Oil and Hindustan Petroleum facilities also have configurations that can accommodate heavy, high-sulfur grades.

That technical capability makes Venezuelan oil commercially relevant. It does not mean every additional cargo will be profitable, or that every refiner should increase purchases. The price discount must remain large enough to compensate for the extra costs and risks.

For Washington, the opportunity is to work with Indian refiners to establish reliable supply arrangements and commercially attractive terms. For India, it is to use competition among producers to improve its options rather than exchange one dependency for another.

Investing in Venezuela is a different proposition

The more consequential question is whether Indian companies should commit new capital to Venezuela’s oil industry.

GTRI estimates that Venezuelan production is running at about 1.1 million to 1.2 million barrels per day, with crude exports of approximately 650,000 to 750,000 barrels per day. Much of the country’s extraction equipment and export infrastructure has deteriorated. Restoring production to its historical peak of more than 3 million barrels per day could take seven to 10 years and require $75 billion to more than $100 billion in investment, the report estimates.

Those figures change the nature of the decision. Buying crude already available for export is a trading decision, subject to price and supply risk. Financing oilfield rehabilitation, upgrading facilities, power infrastructure and export terminals is a long-term capital commitment exposed to political instability, operational delays and uncertainty over future revenues.

India must therefore establish what Washington is actually seeking. Would Indian companies be assured access to additional crude delivered to their refineries? Would they be expected to finance production recovery? Would investments carry guarantees on ownership, payment and the repatriation of earnings? And what protections would remain if U.S. policy changed?

The questions are not theoretical. Indian companies have already experienced the consequences of shifting U.S. sanctions on Venezuela. GTRI notes that restrictions on state oil company Petróleos de Venezuela (PDVSA), culminating in the 2019 oil embargo, disrupted Indian investment and trade. Indian refiners stopped buying Venezuelan crude to avoid exposure to secondary sanctions, while hundreds of millions of dollars in Indian dividend earnings were stranded in Venezuelan accounts and production linked to Indian equity investments was effectively frozen.

That history should make New Delhi cautious about treating diplomatic assurances as a substitute for enforceable commercial protections. A new investment must be evaluated on its own merits, including the possibility that Washington could again alter the rules governing Venezuelan oil.

The Russian-oil double standard

The pressure on India to reduce Russian purchases raises a related question of consistency. GTRI argues that Washington’s own actions to secure Russian diesel supplies expose the tension between its geopolitical objectives and its domestic energy needs.

According to the report, an October 9 arrangement provided sanctions relief for Russian oil sales until April 7, 2027, to improve diesel availability in the United States. GTRI contends that this sits uneasily with pressure on other countries to curb Russian oil purchases on the grounds that the trade generates revenue for Moscow.

The circumstances of American and Indian energy markets are not identical. But the broader principle is difficult to ignore: when supply security and domestic prices become pressing concerns, commercial considerations can shape Washington’s own decisions. India has comparable reasons to weigh crude prices, refining economics and supply reliability when deciding where to buy.

A policy that treats India’s purchases chiefly as a geopolitical issue risks undermining the commercial foundation of the partnership. It may also encourage Indian firms to price political risk into transactions or seek alternatives that are less exposed to changes in U.S. policy.

For American suppliers, that would be counterproductive. The United States can expand its position in India’s energy market by offering competitive prices, dependable deliveries and predictable regulatory conditions. It is less likely to secure durable market share if Indian buyers believe that commercial commitments could be overridden by shifting diplomatic demands.

More commitments, more exposure

Reliance is already linked to a proposed $300 billion refinery project in Brownsville, Texas, announced by President Donald Trump on March 11, 2026. GTRI’s report argues that asking the company to take on additional Venezuelan oilfield investments would add to its financial and operational responsibilities.

The issue is not whether Reliance can participate in multiple markets. It is whether each project offers a sufficient risk-adjusted return. A refinery investment in the United States and an oilfield rehabilitation project in Venezuela would have different financing requirements, timelines and regulatory exposures. They should not be bundled into a broader diplomatic expectation that Indian companies must undertake more investment to demonstrate commitment to the bilateral relationship.

The same logic applies to cooperation beyond crude. U.S. liquefied natural gas, energy technology, storage, infrastructure and low-carbon industries could all create opportunities for Indian and American companies. Investments in these areas would diversify the relationship and give both countries commercial interests that extend beyond the political disputes surrounding Russian oil.

A wider portfolio would also be more resilient. Oil demand, prices and geopolitical conditions will change; a partnership based on several commercially viable sectors is less vulnerable than one dependent on a single supplier or a narrow political bargain.

The measure of Rubio’s visit should therefore be whether it produces transparent terms, dependable supplies and investments capable of generating returns under realistic market conditions. India should welcome American energy where it improves the economics of its supply system, just as it should continue to evaluate Russian, Venezuelan, Middle Eastern and other sources on their merits.

The opportunity is not to make India choose one energy partner over another, but to make a wider range of partnerships commercially worthwhile. If both governments can do that, energy can strengthen the relationship without becoming another front in their trade and geopolitical disputes.