Trump's Venezuela Oil Bet Faces Big Hurdles

President Trump thinks he's found a new lever against Vladimir Putin in Venezuelan oil, but the reality is more complicated, reports CNN's David Goldman. In announcing his new trade deal with Indian Prime Minister Narendra Modi on Monday, Trump said India had agreed to stop buying Russian oil, purchases that are helping bankroll the war in Ukraine, and would instead "buy much more from the United States and, potentially, Venezuela." On paper, Venezuela's oil is a logical replacement: its heavy, sour crude is a lot like Russia's, is well-suited to making the derivatives India needs, and fits India's refineries better than America's light, sweet oil. But as Goldman writes, India can't simply stop the Russian purchases "overnight."

Venezuela currently pumps just over 1 million barrels a day, well short of the 1.5 million India gets from Russia, and its run-down industry would need years and tens of billions of dollars in investment to ramp up. American oil is not only more expensive than the oil India gets from Russia, it's also unlikely to meet the country's needs, Goldman writes. It's "great for making gasoline—but not much else." Plus, India's refineries aren't designed to process it. Sources tell Reuters that only two Indian companies are capable of processing large volumes of heavy crude and that state refiners can replace less than 10% of Russian supplies. As of now, Indian refiners haven't been told to stop Russian purchases, Reuters reports, with shipments expected to arrive into March.