Reliance secures U.S. authorization to import Venezuelan crude

Reliance Industries has obtained a limited authorization from a U.S. authority to purchase crude oil directly from Venezuela, according to a person familiar with the matter who asked not to be named. The license removes a regulatory hurdle that had complicated direct transactions between the Indian refiner and Venezuelan exporters. For Reliance, the permission creates an opening to diversify its crude slate and potentially secure heavier, lower‑priced feedstock that could improve refining margins if commercial terms are agreed. The authorization also sits within a broader U.S. approach that has favored tightly conditioned licenses and oversight mechanisms — including tactical U.S. steps to extract liquidity from sanctioned barrels — rather than wholesale sanction relief. Venezuela’s current output and export capacity remain well below historical peaks, with recent counts around one million barrels per day, limiting how quickly Caracas can replace large volumes India presently sources from alternatives like discounted Russian grades. Operational challenges in Venezuela — aging platforms, clogged pipelines, diluent shortages, decayed export infrastructure and a strained domestic banking system — mean any meaningful scale‑up would require time, capital and legal assurances. Washington and private counterparties are likely to couple permissions with escrow‑style controls, reporting requirements and strict due diligence to manage sanction risks. Insurers, banks and charterers will demand clear legal protections and verified mitigation of secondary‑sanctions exposure before underwriting shipments or extending financing. Caracas has circulated draft hydrocarbons reforms aimed at attracting outside investment, but major Western firms have signaled they would insist on enforceable dispute resolution and strong guarantees before committing large capital; state‑backed Chinese and Indian firms are viewed as more likely early movers. For markets, the authorization could lead to incremental shifts in trade flows and crude pricing spreads if initial cargoes move, but large‑scale reconfiguration of India’s supply mix is unlikely without sustained investment, repairs and clearer financial channels. Ultimately, whether the license translates into steady volumes for Reliance will depend on commercial negotiations, logistics and the willingness of service providers and financiers to engage under the conditions set by U.S. authorities.