RIL wins US licence for Venezuelan oil, says report; what you need to know

Reliance Industries Ltd (RIL) shares were in news in Friday’s trade amid a report by Reuters, which quoting two sources suggested that the United States has issued a general licence to the oil-to-telecom major to buy Venezuelan oil directly without violating sanctions. Business Today could not independently verify the report. 

The report came as India is actively diversifying its sourcing and increasing purchases from West African countries such as Nigeria and Angola, as well as the US, aiming to secure supplies from more than 40 countries. At 3.10 pm, shares of RIL were down 1.90 per cent at Rs 1,422.25. A general licence authorises the purchase, export and sale of Venezuelan-origin oil that has already been extracted, including the refining of such oil countries. 

The US may account for a higher share of India’s crude imports from 6 per cent in 2025, it estimated. “Even though major Indian refiners are open to receiving Venezuelan oil again, viability remains a question mark. Venezuela is roughly twice as far from India as Russia and five-times further than the Middle East, implying much higher freight costs. Discounts on Venezuelan crude are much lower at $5-6 per barrel against $11 per barrel for Russian Urals,” it said.

Nomura noted that operational expenses required to process Venezuela’s extra-heavy high- sulfur crude are much higher. Venezuelan crude is also constrained by its availability, with current production of 1mbpd, most of which is taken up by the US Gulf coast refiners, it noted.

To recall, US officials had earlier suggested that Washington may ease some sanctions on Venezuela’s energy exports. This came after the US capture of Venezuelan President Nicolas Maduro earlier this month. 

“Reliance bought 2 million barrels of Venezuelan crude for delivery in April for its 1.4mbpd refinery complex in Jamnagar, from trading firm Vitol. The Venezuelan Merey crude may have been contracted for a discount of USD6.5/bbl to Ice Brent Crude futures, but cannot be confirmed, according to Argus. Subsequently, IOCL and HPCL also procured combined Venezuelan cargo of 2mbpd for delivery in the second half of April,” Nomura said.