India’s state refiners have turned to Venezuela for fresh crude supplies as they recalibrate sourcing strategies. Indian Oil Corp and Hindustan Petroleum Corp have jointly bought 2 million barrels of Merey crude for delivery in the second half of April, according to two trade sources familiar with the transaction.

The cargo will be shipped on a single very large crude carrier (VLCC), with IOC lifting around 1.5 million barrels and HPCL taking around 500,000 barrels. The shipment is scheduled to arrive at the East Coast of India. The seller is commodities trader Trafigura, the sources said.

The deal signals a broader effort by Indian refiners to diversify crude imports as they reduce reliance on Russian supplies, a move seen as a boost to New Delhi’s efforts to advance a trade pact with Washington.

For HPCL, this is its first purchase of Venezuelan crude. IOC, the country’s largest refiner, had previously processed Venezuelan oil by 2024, according to data compiled by Reuters. Indian companies typically do not comment on spot tenders because of confidentiality agreements. Trafigura declined to comment.

In January, HPCL had indicated it was seeking Venezuelan crude for its 300,000 bpd refinery in Visakhapatnam, Andhra Pradesh, which was recently upgraded to handle heavier grades. IOC earlier processed Merey crude at its Paradip refinery in Odisha.

The Merey cargo is priced against the Dubai benchmark and reflects similar rates at which Reliance Industries procured Venezuelan oil from trader Vitol, one of the sources said. Reliance, which operates the world’s largest refining complex, bought 2 million barrels of Venezuelan crude for delivery in April at a discount of about $6.50 to $7 a barrel to ICE Brent, sources previously told Reuters.

Vitol and Trafigura received US licenses to sell Venezuelan oil after last month’s US military operation to capture President Nicolas Maduro.

Traders and shipping data indicate that US Gulf Coast refiners are struggling to absorb a rapid increase in Venezuelan shipments, leaving some volumes available on the market.

The purchase also comes as the United States and India move closer to concluding a trade pact. The two sides recently announced a framework aimed at reducing tariffs and strengthening economic ties, with the goal of finalizing the deal by March.

While the joint statement on the trade framework did not specifically mention Russian oil, US President Donald Trump rescinded the 25% tariffs on Indian goods that had been imposed on purchases of Russian oil, saying New Delhi had “committed to stop directly or indirectly” importing Russian oil.

(With contributions from Reuters)