An oil super glut is coming—and India may benefit from it

Subscribe to enjoy similar stories. The US's action in Venezuela could have a major impact on the global oil market. Venezuela holds some of the world’s largest proven oil reserves, but years of international sanctions have sharply constrained output.

If US sanctions are lifted following the country’s invasion, it could open the tap for Venezuelan oil. While higher supply is generally positive for consumers, it’s not necessarily so for oil companies. The consensus is that even before the Venezuelan invasion, the global oil market was heading for a glut in 2026.

Prices were expected to fall sharply. While it will take time for Venezuelan oil production to come back online, when it does, it will act as a major additional factor in weak oil prices. This is good news for oil-importing countries such as India.

Venezuela has the world’s largest proven oil reserves, of around 303 billion barrels, according to data from the Organization of the Petroleum Exporting Countries (Opec), the world oil cartel. It accounts for almost 20% of global oil reserves. By comparison, Saudi Arabia, one of the top three countries in oil production, had estimated proven reserves of 267 billion barrels.

But production is a different story. In 2024, Venezuela produced an average of 921,000 barrels per day of crude oil, accounting for 1.3% of the global daily average production. This sharp drop-off from reserves to production is a consequence of global sanctions against the country.

As and when these sanctions are lifted following the invasion, it will still take time for oil majors to ramp up production. Share prices of US oil refiners have already risen sharply. These firms are well-equipped to process the heavy grades of crude produced in