India-US Trade Deal Stalls Over Russian Oil Demand
Negotiations for a major India-US trade agreement face a critical roadblock: Washington’s push for New Delhi to slash imports of Russian oil and switch to alternatives like Venezuela. Experts and former diplomats warn this demand is economically and logistically unrealistic for India.
Key Takeaways
- US demands India cut Russian oil imports as a condition for a trade deal.
- Experts cite four major hurdles in switching to Venezuelan crude.
- Former Ambassador calls the US demand “unrealistic” for India’s energy security.
- An abrupt shift is seen as unfeasible, threatening the trade pact.
Why India Relies on Russian Oil
Since the Ukraine conflict, India has emerged as a top buyer of discounted Russian crude. This strategic move has been crucial in controlling domestic energy costs and inflation. The US, however, views these purchases as indirectly financing Russia’s military actions.
The Venezuelan Proposal: A Flawed Alternative
As part of trade talks, the US—specifically the Trump administration—has suggested Venezuela as an alternative source. Both nations are under US sanctions. Energy analysts list compelling reasons why this switch is impractical for India:
- High Logistics Cost: Venezuela is far more distant than Russia, increasing shipping time and expense significantly.
- Refinery Mismatch: Venezuelan crude is heavier and requires specialized refineries, unlike the Russian grades India’s infrastructure is designed for.
- Supply Instability: Venezuela’s ongoing economic and political crisis makes its oil production highly unreliable.
- No Discount Benefit: Venezuelan oil does not offer the steep price discounts that made Russian imports economically attractive.
Diplomatic Pushback
Former Indian Ambassador to Russia, Pankaj Saran, strongly criticized the US stance. He stated that replacing Russian oil is “not possible” and labeled the demand “unrealistic.” He stressed that and maintaining affordable prices are non-negotiable priorities for India.
Deal Prospects and the Path Ahead
The analysis concludes that while India may gradually diversify its oil sources for long-term security, a sudden pivot from Russia to Venezuela is not feasible. This fundamental disagreement on energy imports remains a major obstacle, casting doubt on the future of the potential India-US trade deal .
