Oil In The Crossfire: ONGC, RIL, And IOC Brace As US Intervention In Venezuela Sends Stocks Soaring

Impact Of US Actions In Venezuela On Indian Oil Stocks

For market participants who are simultaneously tracking international news and their investments, the US intervention in Venezuela is a “watch and wait” situation. The critical issue: will India at last receive those long-pending dues or be granted access to less expensive heavy crude?

The companies that have an interest in the Venezuelan oil fields or have built refineries for the processing of the country’s heavy oil are the ones that are getting the attention. Sanctions have made it difficult for direct trading to take place, but the markets are already factoring in a possible upside if the operations are resumed.

The cleverest strategy? Don’t let the excitement take you over, monitor the updates, evaluate the risk, and keep in mind that geopolitical ventures are often accompanied by uncertainties that are just as high. To put it another way, it is an oil drama that is slowly heating up, profitable for those who take the trouble to read the fine print cautiously.

Affected Indian Companies And Their Stakes in Venezuela

• ONGC (Oil and Natural Gas Corporation)
  • Through its overseas arm, ONGC Videsh Ltd (OVL), the company holds a 40% stake in the San Cristobal field and an 11% interest in the Carabobo-1 project in Venezuela.
  • OVL is owed nearly $1 billion in unpaid dividends and has faced operational restrictions due to US sanctions.
  • A potential US-backed resolution could unlock these funds and allow production to resume, which could boost investor sentiment significantly.
• Reliance Industries Ltd (RIL)
  • Operates the Jamnagar refineries, which are well-equipped to handle Venezuela’s heavy, high-sulfur crude.
  • RIL was previously a major importer of Venezuelan crude, but volumes fell sharply under sanctions.
  • Resumed access could allow RIL to secure long-term discounted crude, potentially improving gross refining margins and reducing input costs.
• Indian Oil Corporation (IOC)
  • Holds a 3.5% stake in the Carabobo-1 heavy-oil project, in partnership with OVL and Oil India.
  • Could benefit directly from the revival of the project and the resumption of associated trade flows.
• Oil India Ltd (OIL)
  • A minority partner with a 3.5% stake in the Carabobo-1 joint venture.
  • Its future prospects are closely tied to the successful revival and stable operation of Venezuelan oil projects.
• Nayara Energy
  • A private refiner capable of processing Venezuela’s heavy crude grades.
  • Resumed access would provide diversification beyond traditional crude sources like Russia and the Middle East, reducing supply risk.
• Hindustan Petroleum Corporation Ltd (HPCL)
  • Shares moved in sync with other oil-linked Indian stocks following US intervention in Venezuela.
  • Reflects the sector’s sensitivity to geopolitical events and crude price volatility.

Watching, Waiting, And Trading: India’s Oil Stocks in a High-Stakes Game

The US intervention in Venezuela has already made its presence felt in the Indian markets. ONGC and Reliance Industries (RIL) shares have increased so much that RIL even reached a 52-week peak, which is a good sign for investors.

Besides single stocks, the uncertain situation with the big powers might lead to a rise in oil prices internationally, which in turn would raise India’s import bill and drive up inflation, given that the country imports 88% of crude for its needs. On the other hand, if a stable US-backed framework leads to the resumption of oil operations in Venezuela and the recovery of stranded investments, then companies like ONGC, IOC, and RIL will be able to reap huge rewards, thus creating this scenario as a high-stakes one for Indian oil investors.