Jefferies has highlighted potential implications for Indian energy companies from evolving geopolitical developments around Venezuela, noting that a possible U.S. takeover or change in stance could lead to easing of sanctions on Venezuelan crude exports. The brokerage believes such a move could materially alter crude trade flows and pricing dynamics over the medium term.
According to Jefferies, a relaxation of sanctions could allow refiners like Reliance Industries to source Venezuelan crude at a discount of around US$5–8 per barrel to Brent, which would be particularly advantageous for complex, diesel-heavy refineries. This could translate into a meaningful uplift in gross refining margins (GRMs), especially if such discounted barrels become available at scale.
The brokerage also pointed out potential upside for upstream players. ONGC could receive approximately US$500 million in unpaid dividends linked to its stake in the San Cristobal field, should Venezuela’s external payment flows normalise following any policy shift.
However, Jefferies cautioned that while near-term implications could be positive for select Indian players, there are medium-term risks to monitor. A revival in Venezuelan crude output could add incremental supply to global markets, potentially exerting downward pressure on crude prices if demand conditions soften or if OPEC+ supply discipline weakens.
Overall, Jefferies sees the situation as a net positive optionality for Indian refiners and upstream companies in the near term, while flagging that global oil price dynamics will need close monitoring if Venezuelan supply meaningfully re-enters the market.
Disclaimer: The views and recommendations above are those of Jefferies. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
