Explained: How Venezuela crisis may benefit Indian upstream oil stocks

With the US capturing Venezuela’s President Nicolás Maduro on January 3 and taking him to face charges in a US court, including narco-terrorism conspiracy and cocaine importation conspiracy, the oil market came into sharp focus. The US President Donald Trump announced that the US oil companies will invest an unspecified amount to revive the oil infrastructure in the South American nation and increase its oil output, enabling higher crude flows to the US and other markets.

Venezuela, which has the largest oil reserves (303 billion barrels), produced 0.9 million barrels per day (mbd) in November 2025, compared to 2 mbd in the early 2010s. 

Centrum Broking noted the transitioning of governments and investment by oil companies in less stable economies have proved to be a challenge over the past decade. It said a significant increase in output from Venezuela remains limited due to years of underinvestment by the state- owned oil producing firm PDVSA. 

In a best-case scenario, Choice said the output could increase by 150kbd during 2026, wherein only operational expenditure would be required rather than capital expenditure. Choice said further increase in output would only come from the next calendar year, provided there is significant investment done by the oil companies. 

The domestic brokerage felt Indian upstream players may benefit as access to equipment and investments could be restored, enabling higher output from the San Cristobal and Carabobo-1 fields, where Indian firms operate jointly with PDVSA.

Indian refiners, it said, could also gain from increased imports of heavier Venezuelan crude, which typically trades at a discount to Brent and supports higher gross refining margins. India had earlier imported up to 400 thousand barrels per day of Venezuelan crude, it noted

The availability of heavier barrels could accelerate the rationalisation of simpler refineries globally, even as more complex refining capacity comes on stream in India and China, Choice said adding that this could lead to tighter product supply balances and improved crack spreads over the medium term.

"We continue to expect Brent to average at USD 61.5/b in CY26, as we believe limited additional barrels could enter the market during the current year, resulting in limited downward pressure on oil prices. However, additional barrels from Venezuela may increase supply and weigh on prices beginning next year," it said.