Two powerful earthquakes in Venezuela have caused massive devastation. After this natural disaster, concerns about India’s crude oil supply have also increased. Experts believe the impact on ports, possible delays in shipping and increased insurance costs could impact oil imports to India.
Why is this earthquake important for India?
In recent months, India had increased the purchase of crude oil from Venezuela amid uncertain conditions in the Middle East. This disaster that came at such a time is being considered as a new challenge for India. Experts say that if Venezuela’s export structure is affected, it could impact many oil importing countries.
Oil import had increased in recent months
During April and May, India had significantly increased the import of crude oil from Venezuela. Indian refineries had turned to Venezuela as an alternative source amid supply uncertainties in the Middle East, making it one of the major suppliers.
Not only oil production, supply chain also likely to be affected
According to experts, the risk is not limited to oil production or plants only. Situations like power supply disruptions, road and transport networks being affected and port restrictions may delay the movement of ships. It is feared that the entire supply chain will be affected due to this.
Shipping and insurance costs may increase
If ships have to wait longer at ports or have to change routes, shipping costs and demurrage charges could increase. It may also affect oil traders, refineries and insurance companies. Experts say that now natural disasters will also have to be included in the risk assessment of maritime trade.
India’s investment may also be affected
Indian government company ONGC Videsh has also invested in Venezuelan oil projects. If production or exports remain affected for a long time, India’s economic and operational interests may also be affected.
High level talks were held recently
This month, possibilities of cooperation and investment in mining, critical minerals, pharmaceutical and automobile sectors were discussed between Prime Minister Narendra Modi and Venezuela’s acting President Delsey Rodriguez. However, these plans are expected to be affected after the earthquake.
Will keep an eye on the situation
Experts believe that connecting with a new supply source also brings new types of risks. After a complete assessment of the loss in the coming days, shipping companies, energy sector businessmen and insurance companies will decide the future strategy.
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