Venezuela developments unlikely to impact near-term global crude prices: Crisil Ratings

Crisil Ratings on Tuesday said the recent developments in Venezuela are unlikely to have any material near-term impact on global crude oil prices, noting that the Latin American country accounts for a relatively small share of global oil supply. 

The comments come after a U.S. military operation in early January led to the capture of Venezuelan President Nicolas Maduro on drug-related charges, triggering political and economic uncertainty in the country, which holds some of the world’s largest proven crude oil reserves. 

Impact on global oil prices

In a note, Crisil said that even if the situation escalates and disrupts crude oil production in Venezuela, the impact on global prices would likely be limited as the country contributes only about 1.5% of global crude supply. Brent crude prices have remained largely stable in recent days, trading just above $60 a barrel. 

Impact on India's trade

The ratings agency noted that the developments are also unlikely to have any significant impact on India’s trade or the credit quality of Indian companies. India’s direct trade exposure to Venezuela remains minimal, it said. 

Imports from Venezuela account for less than 0.25% of India's total imports, with crude oil comprising over 90% of the roughly ₹14,000 crore worth of imports in FY25. Venezuela supplies about 1% of India's crude oil requirements. While India imports nearly 85% of its crude oil needs and remains sensitive to global price movements, Crisil does not expect the situation in Venezuela to influence oil prices in the near term. 

Over the medium to long term, however, increased investments in Venezuela’s large untapped oil reserves could boost global supply and potentially soften crude prices, which would be positive for Indian companies, Crisil said. 

"While we do not anticipate any material near-term impact of the Venezuela situation on crude oil prices, investments to increase crude oil production in Venezuela could boost global supply and lead to softer crude prices over the medium to long term, which could be a positive for India Inc," the agency said. 

India's exports to Venezuela stood at less than ₹2,000 crore

India’s exports to Venezuela stood at less than ₹2,000 crore in FY25, accounting for under 0.1% of total exports. These shipments were diversified across sectors such as pharmaceuticals, ceramics, textiles and two-wheelers. Pharmaceutical exports were around ₹900 crore, less than 0.5% of India’s total pharma exports. 

Crisil said it does not expect any material impact on the credit profiles of Indian companies with exposure to Venezuelan customers, given the limited scale of trade, but added that it will continue to closely monitor developments.