Reliance Industries Ltd, one of the world’s largest oil refineries and the biggest buyer of oil from Russia, is now moving away. Mukesh Ambani’s Reliance Industries Ltd. is finding new sources of crude oil that are away from Russia. Why is the company doing it now? Is it due to pressure from the U.S. and EU? Where exactly is the oil sourcing now? How will this impact Reliance Industries Ltd? What’s India’s role in it? For all that, learn more.
Why Reliance Industries Ltd. Is Finding New Ways Now?
The company is under considerable pressure from Western countries, mainly the U.S. and the European Union (EU).
U.S. Pressure
The U.S. has long been asking India to reduce its purchases of Russian oil because of the war in Ukraine. However, India’s cordial relationship with Russia didn’t budge. In recent times, U.S. President Donald Trump claimed that India has agreed to stop importing from Russia. But India didn’t confirm any of that. It also clarified that India might reduce but not completely stop buying from Russia.
EU Ban Coming
The EU announced that it will ban fuel made from Russian crude oil altogether starting on January 21, 2025. Here’s the catch: Reliance exports a lot of refined fuel (like petrol and diesel) to Europe. If the company didn’t change its ways, it would hurt its exports.
Reliance values the European market highly and doesn’t want to disappoint the EU, so the company is shifting to non-Russian oil sources.
What Reliance Is Doing?
Reliance is buying oil from the Middle East. Recently, the company has bought at least 2.5 million barrels of oil. It’s apparently working with:
- Iraq’s Basrah Medium
- Al-Shaheen (from Qatar)
- Qatar Land (also from Qatar)
Several traders say this is a massive shift for Reliance as the company is now actively buying the region.
The company is also looking for more oil types that are similar to Russian crude oil quality so that it can eventually replace Russian supplies.
Note: Reliance didn’t confirm or comment on anything due to the holiday season
India’s Role
India is one of the largest buyers of Russian oil. Ever since the war began, Russia has been giving India oil at a discounted price. Reliance, on the other hand, is the single largest buyer of Russian oil. After being closely scrutinised by the U.S. and EU, the company had to change its ways to adjust and fit into the market. The company is more on its own, and India has very little to do with this shift.
Devashish Shrivastava
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