The US Strikes Venezuela: Impact on Global Oil Prices and Energy Security in India

The US military intervened in Venezuela and captured Venezuelan President Nicolas Maduro and his wife, Cilia Flores. The US has carried out an overnight strike across the Caracas region, which has caught the eye of the global energy market and impacted the global oil market.

The United States has launched a military strike against Venezuela as part of ‘Operation Southern Spear’ across the Caracas region. It shows a significant geopolitical shift, captured by the Venezuelan President Nicolas Maduro and his wife Cilia Flores, which marks a climax in years of diplomatic and economic tensions between Washington and Caracas. Venezuela has the largest oil reserves in the world; this development has sparked immediate questions regarding the stability of global energy markets and economic consequences for the major oil importer countries. 

Key Highlights: 

• On January 3, 2026, the United States conducted airstrikes targeting the key military and government facilities in the Caracas region of Venezuela.

• The US president, Donald Trump, announced that Maduro and his wife, Cilia Flores, have been captured and will face prosecution in the United States. 

• Delcy Rodriguez, an ally of Maduro, was sworn in as acting president in charge of Venezuela. 

• The US President Donald Trump said Venezuela would supply between 30 million and 50 million barrels of oil to the United States; the proceeds from the sale would be used to benefit the people of both countries.

• Oil infrastructure and its primary oil production and refining facilities remain undamaged, which is updated by the PDVSA. 

• Crude oil prices in the global market remained relatively stable, hovering around $60 per barrel, as markets had already factored in long-standing US sanctions.

• Experts suggest a minimal direct impact on India’s energy security due to low current dependence on Venezuelan crude. 

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Why did the United States attack Venezuela?

Source: Britannica 

The US military strikes on Venezuela as part of “Operation Southern Spear” follow months of rising tensions. The Trump administration justified the military intervention by citing the Maduro government running a ‘narco-state’ and recently designated Venezuelan gangs as terrorist organisations or other charges like cocaine importation conspiracy and possession of machineguns and destructive devices against the United States. Historically, the US has expressed interest in Venezuela’s oil wealth. Recently, Trump remarked that the "stolen oil must be returned", signalling a desire for American companies to play a larger role in the region. The operation is the culmination of a "maximum pressure" campaign involving maritime blockades (December 2025) and previous strikes on alleged drug-smuggling vessels.

The critics argued that the US move is ‘straight up theft’ to take control of Venezuela’s massive oil reserves, as Venezuela holds the largest proven crude oil reserves in the world, which are over 300 billion barrels, or 1/5th of the global crude oil reserve, according to the US Energy Information Administration, though currently Venezuela produces only 1 million barrels per day, which accounts for 0.8% of the global crude oil output. 

What will be the impact on global oil supply and prices?

Venezuela is home to the largest crude oil reserve in the world. The country has the potential to produce over 3 million barrels per day. It can impact the global oil economy

• The US president has made oil central to his rationale, stating the US would take control of Venezuela’s oil reserve. As of now, the key oil ports like the port of La Guaira are still functional; no damage has occurred, so no supply shock has occurred, but it could impact future global oil prices due to the supply chain disruptions. 

• Global oil market investors are cautious but not panicked due to the good supply, and the US is one of the high production levels acting as a buffer.  

• All eyes of the global oil market economy are now on the upcoming OPEC+ meeting to see if the group will adjust production in response to the political instability in Caracas.

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What does it mean for India?

As India is the world’s third-largest crude oil consumer, which is historically a major buyer of Venezuelan crude oil, India’s current oil largely comes from Russia and the Gulf countries; however, the current situation presents a mixed bag for New Delhi. 

• The former Indian ambassador R. Vishwanathan stated that Indias is currently not heavily dependent on Venezuelan oil due to sanctions; Indian refiners had already diversified their sources. 
• ONGC Videsh (OVL) has significantly invested in Venezuelan oil fields like the San Cristobal projects. If any regime change or prolonged conflict were to occur, the assets of the ONGC could be at risk, which can also impact India's crude oil-based economy. 
• If the geopolitical conflict escalates in South America, which could lead to a sustained spike in Brent crude oil prices, India's oil import bill could rise; however, as far as the oil prices stay near $60, the fiscal impact for India remains manageable due to the diversified oil import. 
• Due to the previous oil sanctions, it has recently focused on diversifying the oil imports from countries like the US, Saudi Arabia and Iraq to offset disruptions from Russia and South America. 

The US intervention in Venezuela marks a historic geopolitical shift in Latin American politics. The US control of Venezuela’s oil reserve has broadened the US interpretation of Latin America as a strategic sphere of influence, and for the global energy market, the immediate concerns are the safety of oil infrastructure, supply chain disruptions and fluctuations in the global oil-based economy.

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