Wedoany.com Report on Feb 14th, Reliance Industries Limited has secured a US general license to directly procure Venezuelan crude oil. As India's largest private refiner, this move enables it to resume importing discounted heavy feedstock to match the configuration of its Jamnagar refinery, thereby enhancing refining margins.

Informed sources revealed that Reliance Industries, which operates the world's largest single-site refining facility in Jamnagar, Gujarat, is among the international companies that obtained a US general license in late January, allowing direct purchases of Venezuelan oil without violating sanctions.

The US recently eased restrictions on Venezuela's energy sector to promote oil exports from the South American nation, which holds the world's largest oil reserves.

Reliance Industries declined to comment on the matter.

Previously, the US permitted the sale of Venezuelan oil through traders, but the new general license authorizes companies to procure directly from oil-producing or owning entities.

Before US sanctions were imposed in 2019-20, Reliance Industries was a steady buyer of Venezuelan crude. The company procured oil when the US offered temporary sanctions relief in 2024. This year, as Venezuelan oil returned to the market via traders, Reliance purchased 2 million barrels from Vitol.

State-owned Indian Oil Corporation and Hindustan Petroleum Corporation also participated in the procurement, jointly buying 2 million barrels. Of this, 1.5 million barrels were for Indian Oil's Paradip refinery in Odisha, and the remaining 500,000 barrels were for Hindustan Petroleum's Visakhapatnam plant in Andhra Pradesh.

Prior to sanctions, Indian Oil Corporation was also a regular customer for Venezuelan crude.

Sources noted that developing Venezuelan oil resources is part of India's strategy to diversify its crude supply, occurring against a backdrop of anticipated reductions in imports from Russia.

Venezuela's crude grades, particularly from the Orinoco Belt, are primarily heavy and extra-heavy. Reliance's Jamnagar refinery is one of the world's technologically advanced facilities, specifically designed to process heavy, high-sulfur crude oils, which trade at a discount to international benchmarks due to production and logistics factors.

Procuring Venezuelan oil will help Reliance Industries optimize refining margins, as this feedstock can be converted into high-value products like diesel, kerosene, and LPG, which have steady demand in both Indian and export markets.

Reliance's business model is based on integrated refining and petrochemical operations. Heavy crude has a high residue content that can be broken down into valuable petrochemical feedstocks. Access to lower-cost Venezuelan heavy crude helps improve petrochemical business margins when converted into polymers and specialty chemicals.