 "What Trump’s 25% tariff threat on Venezuelan oil could mean for India")
The Trump tariff threats continue. On Monday (March 24), the US president said he would be imposing a 25 per cent tariff on all imports from those countries that buy oil or gas from Venezuela. The latest 25 per cent levy targeting direct and indirect buyers of Venezuelan oil will take effect as soon as April 2, according to an order signed Monday by Trump.
Trump has already dubbed April 2 ‘Liberation Day’ for the American economy, already promising reciprocal tariffs tailored to each trading partner in an effort to remedy practices that Washington deems unfair.
The move, according to experts, has implications for India — not only will it hurt the country’s energy sector but also its oil import diversification strategy.
Trump’s 25% tariff on Venezuelan oil
On Monday, Trump said the US would impose a 25 per cent tariff on all imports from any country that buys oil from Venezuela. On Truth Social, his social media account, he wrote that there were “numerous reasons” for imposing the tariff.
“Venezuela has purposefully and deceitfully sent to the United States, undercover, tens of thousands of high level, and other, criminals, many of whom are murderers and people of a very violent nature. Among the gangs they sent to the United States, is Tren de Aragua, which has been given the designation of “Foreign Terrorist Organisation,” wrote Trump.
“In addition, Venezuela has been very hostile to the United States and the freedoms which we espouse. Therefore, any country that purchases oil and/or gas from Venezuela will be forced to pay a tariff of 25 per cent to the United States on any trade they do with our country. All documentation will be signed and registered, and the tariff will take place on April 2, Liberation Day in America. Please let this notification serve to represent that the Department of Homeland Security, Border Patrol, and all other Law Enforcement Agencies within our Country have been so notified. Thank you for your attention to this matter!”
Speaking to reporters later on Monday, Trump said the 25 per cent tariffs on buyers of Venezuelan crude would come in addition to any existing levies. “That’s on top of existing tariffs — yes,” the president said.
Notably, the US itself, currently, continues to be a purchaser of Venezuelan oil — it is one of the top foreign suppliers of the US as per data provided by the US Commerce Department. In fact, in 2024, the US bought $5.6 billion worth of oil and gas from the Latin American nation. This came after the Biden administration briefly lifted sanctions on Venezuelan oil in 2023. But they were reinstated in April 2024 after the US accused the country’s leader, Nicolás Maduro, of failing to hold free and fair elections.
However, Venezuelan oil continues to make its way to Washington owing to a joint-venture licence US-based Chevron was granted to pump oil there, which has been extended until May 27.
Trump’s move, unsurprisingly, evoked a reaction from Venezuela, which called the measure a “new aggression” by Washington. “They can sanction and impose tariffs on whatever they want, what they cannot sanction is the love and patriotism of the Venezuelan people,” President Nicolas Maduro said during an event broadcast on radio and television.
Possible impact of Trump tariff on India
Energy experts have noted that Trump’s 25 per cent tariff on Venezuelan oil will sow fresh global trade uncertainty. In addition, India will be impacted by the move as it is a buyer of Venezuelan oil.
India resumed crude oil imports from Venezuela in December 2023 after a gap of over three years, as the US temporarily eased sanctions on the Venezuelan oil sector. In 2024, India imported 22 million barrels from the Latin American nation — which is 1.5 per cent of the country’s total crude oil purchases.
An analysis of the data shows in December 2023, India imported approximately 191,600 barrels per day (bpd) from Venezuela. The following month, Venezuelan oil imports rose to over 254,000 bpd. In fact, for these two months, New Delhi became the top buyer of Venezuelan crude oil.
But the imports are now not as significant as it used to be. An Indian Express report states India imported around 65,000 barrels per day (bpd) of Venezuelan crude in January and 93,000 bpd in February, per data from commodity market analytics form Kpler.
If Trump’s plans to impose secondary levies on Venezuelan oil do come into effect, it would increase procurement costs and disrupt supply chains. Moreover, it would force New Delhi to rethink its oil import diversification strategy.
Experts note that the tariff would be significant for India as its oil dependency is surging. As per the oil ministry’s Petroleum Planning & Analysis Cell, India’s oil import dependency stood at 88.2 per cent in April–February, up from 87.7 per cent in the same period of 2024. There’s a high probability that India would have to relook Russia as its source of oil, which, once again, would put them at odds with the European world.
Also, the tariffs could lead to increased oil prices, which would eventually add to the inflationary pressures in India. As The Economic Times reported, it would affect transport, manufacturing, and overall economic growth.
A direct hit to China
However, Trump’s 25 per cent tariffs on Venezuelan oil won’t impact India alone. In fact, China will be the biggest loser. That’s because Venezuelan oil is more important to China than any other country.
Of the 921,000 barrels of crude oil that Venezuela produced in 2024, 351,000 barrels per day were shipped to China last year, as per data provided by Lipow Oil Associates.
Matt Smith, lead oil analyst of the Americas at Belgian analytics provider Kpler, told CNN, “This announcement by the Trump administration appears to be one more action targeting China.”
Trump has already enacted 20 per cent tariffs across all Chinese goods entering the United States, with steel and aluminium imports facing an additional 25 per cent tariff. Given the nature of this tariff, if China continues to purchase Venezuelan oil, the 25 per cent tariff would mean Chinese goods America imports will face a 45 per cent tariff.
With inputs from agencies
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