Mukesh Ambani-led Reliance Industries (RIL) has cut back on its crude oil imports from the Russia and in the coming months is expected to stop buying from entities sanctioned by the Donald Trump administration. RIL is the largest buyer of Russian crude in India.This strategic move aims to ensure compliance with Western sanctions whilst maintaining access to markets in the United States and Europe, sources told ET.
Reliance crude imports from Russia see sharp drop
Data from Kpler, a provider of real-time global analytics, shows Reliance’s imports dropped to 534,000 barrels per day (bpd) in October. This is a 24% drop from September and 23% below the April-September mean. The Russian portion of Reliance’s crude imports decreased to 43% in October compared to 56% in September.Russian oil shipments received in October were ordered in August, as procurement typically occurs one month before loading, with vessels requiring an additional month to reach Indian shores.In contrast, Nayara Energy, supported by Rosneft, increased its Russian crude acquisitions last month, sourcing all its requirements from Russia.
RIL crude imports: Cut-off imminent
To compensate for reduced Russian supplies, Reliance increased its Middle Eastern imports significantly. Saudi Arabian volumes increased by 87% whilst Iraqi supplies rose by 31%. This adjustment raised their combined contribution to 40% of total imports in October, up from 26% in September.Crude imports from the United States doubled to approximately 10% of Reliance’s total intake, compared to 5% in September.
Why RIL ‘can’t afford’ to violate sanctions
According to the ET report, the reduction in October crude oil imports was not due to the recent US sanctions on Rosneti and Lukoil, Russia’s primary oil exporters.Rather, it stemmed from earlier uncertainties, including the Trump administration’s pressure tactics, punitive 50% tariffs on Indian exports implemented in late August, and the European Union (EU) sanctions announced in July, effective January.The new US sanctions have created a direct limitation for RIL, as Rosneft is obligated to provide the Indian refiner and retailer approximately 500,000 bpd under a contractual agreement. Additionally, continuing purchases from a sanctioned entity risks secondary sanctions.“RIL just can’t afford to violate sanctions. It has too much exposure to the US. Some of the biggest tech companies have invested in its tech ventures,” a source told ET, noting that the company intends to stop crude shipments from sanctioned Russian entities after the November 21 deadline for US sanctions wind-down period.Reliance could potentially resume Russian oil imports if international restrictions are lifted in the future, the source added.Reliance has officially said that it will adhere to international sanctions.A recent European Union clarification outlined provisions for refiners to export fuels to Europe despite Russian crude imports. “If Russian crude oil can be segregated and processed separately by the refinery, import into the EU is allowed, subject to proving that the petroleum product exported to the EU comes from the ‘production line’ using non-Russian oil,” the EU said.For refineries unable to segregate Russian crude, exports to the EU remain possible by demonstrating the absence of Russian oil in their production line over the preceding 60 days, according to the clarification.
