Rubio, Venezuela and Reliance: how oil ties US policy to India

what happened

Moody's analysts argue that Marco Rubio's recent visit to India was driven mainly by oil rather than by a long-delayed trade deal. He skipped Delhi, went to Mumbai and toured the Reliance Industries refinery complex at Jamnagar. The authors link this to the oil squeeze caused by the war with Iran, after retaliation by Tehran and its Houthi allies effectively closed the Strait of Hormuz and the Bab el-Mandeb Strait to normal flows.

Washington is looking to Venezuela as a substitute supply source. According to the US, a joint venture in which the Defence Department holds a 35 per cent stake runs 17 oil fields that the US puts at 65 billion barrels of proven reserves. Experts cited by Associated Press say recoverable reserves are only a third of the OPEC figure, and output, though recovered to 1.1 million barrels a day in 2025, remains far below the 2.9 million reached in 2008. Venezuelan crude is heavy and high in sulphur, so it needs complex refining capacity, which Reliance has.

Reliance exported 21.66 million tonnes of refined products in the first half of 2025, including 9.81 million tonnes of diesel, according to Reuters estimates. The company is also a major backer of America First Refining's project in Brownsville, under a binding 20-year offtake commitment.

why it matters

For markets, the key point is that US oil policy is now central to its foreign strategy and affects the supply balance for Brent and refined products. If Venezuelan output and Indian refining of heavy crude grow, that could partly offset lost Gulf flows, but investment needs and logistics remain major constraints.

market impact

Нефть: сбой поставок через проливы и ставка на венесуэльский баррель влияют на Brent, WTI и цены дизеля

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