What is the guarantee that USA will allow us to purchase Oil from Iran and Venezuela? What if they simply put a blockade on all 3 and tell you to purchase from them? Nothing stops them from running a monopoly...India refineries are a competition to the US refineries which can process heavy crude why would USA would be eager to sell us Venezuelan crude when they can monopolize it. Let's not be super happy about these developments.
1. What will that get them? I don't know if anyone remembers but In sept-nov, when oil thing was at its high , India had told US that India won't budge on oil issue unless Iranian and Venezuelan oil enters the market. I don't believe that people in ministry would've thought that US would go hard power, given the trump rhetoric back then, but it essentially solved that point.
2. Just because they captured the venezulean oil fields, it won't ramp up the infra miraculously, needed to substantially substitute the needs. So, even with marginal increase, the overall supply remains similar. If US uses this crude to sell petroleum products to Europe, it will free West Asian supply. The loss to china from Venezuelan oil can be countered by increasing Russian oil, which could be freed if India increases oil purchase from west asia instead. These are all hypothetical, pointing out several ways and geopolitical connections which takes cares of supply-chain. Remember, China will be hit harder since it's the major beneficiary from Iran and Venezulean oil right now. So, the world's second biggest economy and rival of USA will play it's games. Hopefully, India does whatever is best for our long term interests.
3. The oil cartel is strong. If Trump does something that threatens the overall profits, they can either decrease or increase the oil extraction and supply. They have the infrastructure available for it. At the end of the day, India imports crude oil, it will only import crude oil. Not the processed version that it's own refineries does.
My working theory so far:
Since US has openly used hard power for maintaining its "sphere of influence" and less than expected response from China so far, if we assume that China-US ( G2) has come to some unofficial agreement behind the scenes for it.. China could give up a bit in Latin America in exchange for increasing influence over Russia. I say this, because right now India is doing what it can to be there with Russia through trade, but if oil order goes substantial down, and russia redirects it to China, it's dependency on Chinese yen increases.
This adversarial narrative and move from US has essentially laved way for China to get back into Indian sphere, pushing back US.
Let's see how things unfolds.. for now, China has strong connection in Latin America through Brazil, Arg etc.. and huge resources. While US got hold over pacific and Pak-afg.
Africa seems to be the frontier now, with China far far ahead of US and West.
This isn't India centric. But G-2