A powerful earthquake in Venezuela has triggered fresh concerns over India’s growing dependence on crude oil imports from the South American nation. Industry experts say the disaster could lead to shipping delays, port disruptions and higher transportation costs, affecting one of India’s emerging energy supply routes.
The twin earthquakes, measuring 7.2 and 7.5 in magnitude, struck Venezuela on June 24 within seconds of each other. The tremors were the strongest recorded in the country in more than 125 years and have left hundreds dead and thousands injured.
India’s growing dependence on Venezuelan oil
The timing of the disaster is significant for India. The country had recently been dealing with supply concerns linked to the conflict involving Iran. The peace agreement between the US and Iran had raised hopes of smoother oil movement through the Strait of Hormuz.
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At the same time, India had increased crude purchases from Venezuela. Imports rose sharply during April and May as refiners looked for alternative sources amid uncertainty in the Middle East.
Shipping and insurance concerns emerge
According to Kunal Khanna, Managing Director - Reinsurance & Global Head of Natural Resources at EDME Insurance Brokers Ltd, the risks extend beyond physical damage to oil facilities, reported NDTV.
"India's exposure is growing because Venezuela has become an increasingly important supplier in a very short period of time," Khanna noted.
Power outages, damaged transport infrastructure and restrictions at ports could delay cargo movements and disrupt shipping schedules. La Guaira, one of Venezuela’s important cargo gateways, has already been placed under a disaster declaration.
Longer waiting times for tankers, route changes and additional charges could increase costs for shipping companies and refiners.
"The corridor was evaluated mainly through the lens of shipping and political risks. Natural catastrophe exposure is now part of the equation," he said.
Impact on investments and future plans
The earthquake may also have implications for Indian investments in Venezuela. Per NDTV, ONGC Videsh has stakes in oil projects in the country, making prolonged disruptions a matter of concern for both operations and investments.
The disaster comes shortly after Prime Minister Narendra Modi held discussions with acting President Delcy Rodriguez on expanding cooperation in sectors such as mining, pharmaceuticals, automobiles and critical minerals.
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As authorities continue to assess the extent of the damage, energy companies, insurers and traders will closely monitor developments in Venezuela, which has become an increasingly important source of crude oil for India.
FAQs:
Why is the Venezuela earthquake important for India?
India has recently increased crude oil imports from Venezuela, making supply disruptions a concern.
Can the earthquake affect India’s oil supplies?
Shipping delays, port disruptions and higher insurance costs could impact oil shipments from Venezuela.
