Reliance Industries faces scrutiny over its decision to purchase Venezuelan crude oil from the United States at costs exceeding Middle Eastern alternatives, according to strategic studies expert Brahma Chellaney. The expert from the Centre for Policy Research has questioned the economic rationale behind the oil refining giant's procurement strategy.
Cost Analysis Reveals Premium Pricing
Chellaney highlighted that Reliance will pay more for Venezuelan crude compared to traditional Middle Eastern supplies when factoring in shipping costs. The expert emphasized that these oil purchases appear to serve primarily as a political signal to the Trump administration rather than an economically motivated decision.
| Cost Comparison: |
Venezuelan Crude |
Middle Eastern Crude |
| Base Price: |
Full market value |
Standard market rates |
| Shipping Costs: |
Higher due to US routing |
Lower due to proximity |
| Total Cost Impact: |
Slightly more expensive |
More cost-effective |
US Controls Seized Venezuelan Oil Assets
Following military action in Venezuela, the United States has gained control over substantial oil reserves. The seized assets include significant volumes stored in various facilities under US pressure.
| Asset Details: |
Specifications |
| Total Volume: |
30.00-50.00 million barrels |
| Storage Locations: |
Tankers and Caracas facilities |
| Pricing Structure: |
Full market value without discounts |
| Grade Specification: |
Sold at prevailing rates for specific crude grade |
Payment Mechanism Through Controlled Accounts
The payment structure for Venezuelan crude purchases involves a complex arrangement that bypasses direct treasury payments. Chellaney explained that Reliance will deposit sale proceeds into US-controlled accounts at globally recognized banks rather than making direct payments to the US Treasury.
Reports suggest the Trump administration aims to route these funds through offshore accounts, potentially providing the executive branch greater flexibility in managing the money without congressional oversight. Critics have labeled this arrangement a potential "slush fund," raising concerns about transparency and accountability.
Legal Risks Persist Despite Sanctions Waivers
Despite anticipated sanctions waivers from Washington for oil buyers, Chellaney warned that significant legal risks remain for foreign purchasers. The expert noted that buyers face ongoing uncertainty regarding regulatory compliance and potential future sanctions modifications.
Expert Background and Credentials
Brahma Chellaney serves as Professor Emeritus of strategic studies at the Centre for Policy Research, bringing over three decades of experience in international security and arms control issues. His academic credentials include a PhD in International Studies from Jawaharlal Nehru University and a degree from the Delhi School of Economics.
| Professional Highlights: |
Details |
| Published Works: |
Nine books authored |
| Government Role: |
Former advisor to India's National Security Council |
| Advisory Positions: |
Member of Policy Advisory Group under Foreign Minister |
| Board Participation: |
Convener of External Security Group, National Security Advisory Board |
The expert's analysis comes following the US military intervention in Venezuela and the capture of President Nicolas Maduro, with Trump stating that the US will "run" Venezuela until a safe democratic transition is secured.
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