India is emerging as a potential beneficiary of the United States’ move to oust Venezuela’s communist dictator Nicolas Maduro, a development that could significantly alter the strategic and economic balance in the oil-rich Latin American nation. For years, Venezuela remained firmly within China’s sphere of influence, leaving India with only a limited and largely unproductive presence in the country’s energy sector.
India’s exposure to Venezuela has primarily been through ONGC Videsh Limited, which holds a 40 per cent stake in the San Cristobal oil field. Despite this investment, India has not received payments amounting to US$536 million that were contractually due. In total, India is owed close to US$1 billion. With the prospect of a new US-backed government taking charge in Caracas, New Delhi may finally gain the leverage needed to recover its dues and expand its footprint in the country.
A change in regime is also expected to sharply curtail China’s dominance over Venezuela. Although the country possesses an estimated 303 billion barrels of crude oil reserves, the largest in the world, its production has collapsed under years of mismanagement and sanctions. Venezuela currently produces barely 1 per cent of global crude output, despite holding around 18 per cent of proven reserves. Of its roughly one million barrels per day of production, China accounts for nearly 80 per cent.
This imbalance is likely to change if foreign investment flows back into the Venezuelan oil sector. Increased production, fresh capital, and better management could revive the economy of a country where nearly 90 per cent of the population lives in poverty and about 67 per cent in extreme poverty, a tragic paradox for a nation richer in oil than Saudi Arabia.
India’s stock markets appeared to price in these geopolitical shifts on Monday. Shares of Oil and Natural Gas Corporation rose 2 per cent to ₹246.80, making it the top gainer on the Nifty index. Reliance Industries also gained over 1 per cent, hitting a 52-week high of ₹1,611.8. According to a report by global investment banking firm Jefferies, Reliance Industries and ONGC are among the companies best positioned to benefit from a restructuring of Venezuela’s oil industry under US influence.
The developments have sparked protests from communist parties, including Communist Party of India (Marxist), which demanded the restoration of the Maduro regime. Kerala Chief Minister Pinarayi Vijayan even called on India to criticise the United States. New Delhi, however, has maintained that it stands with the people of Venezuela, not with American occupation, nor with a failed communist dictatorship. In contrast, reactionary communists across the world, aligned with China, have been left rattled. Once again, India’s communists have exposed where their loyalties lie.
