Indian energy stocks are back in focus after Jefferies on Monday highlighted potential benefits for Reliance Industries Ltd. and ONGC from a possible US-led takeover or deeper involvement in Venezuela’s oil industry. While the brokerage expects the near-term impact on global crude prices to be insignificant, it believes the strategic implications could be meaningful for select Indian companies over the medium to long term.
Venezuela holds nearly 18% of the world’s proven oil reserves, yet its current production is less than 1% of global crude output, at under one million barrels per day. Years of underinvestment, sanctions and operational challenges have severely constrained output.
Jefferies notes that the latest geopolitical developments are unlikely to materially alter global oil supply in the near term and therefore should not meaningfully move crude prices immediately.
However, the medium-term picture could look very different. Jefferies believes that if US oil majors step in to revive Venezuela’s oil industry, it could lead to a gradual ramp-up in production over the coming years. Such a revival would require significant capital expenditure and technological input, areas where US majors have a clear advantage. If Venezuelan output meaningfully increases, it could weigh on global crude prices in 2027–28, unless OPEC+ actively intervenes to balance the market.
