Reliance likely to switch back to West Asia oil if Russian supply dries up

Business Standard

08-08-2025

Reliance Industries is likely to shift back to its traditional Middle Eastern sources for oil if India yields to pressure from US President Donald Trump to cut Russian imports, trade sources said.
India became the biggest buyer of seaborne Russian crude in the aftermath of Moscow's 2022 invasion of Ukraine and is under heavy pressure from Washington to cut its energy ties with Russia.
India's biggest buyer, Reliance, operates the world's largest refining complex at Jamnagar in Gujarat where it can process about 1.4 million barrels per day (bpd).
"If Reliance stops buying Russian crude, they will most likely turn to Middle Eastern suppliers due to geographic proximity. The good news is that OPEC is increasing crude output as part of its plan to unwind voluntary cuts," said Anh Pham, a senior analyst at LSEG.
"Any hit to Russian supplies will increase their participation (in the spot market) and that would tighten spot market and raise prices. They are a giant player," said Tushar Tarun Bansal, senior director at oil consultancy Alvarez and Marsal.
"They have to take more of Middle Eastern grades, mainly from Saudi Arabia and UAE. Also, they would look at buying more from Latin America such as Brazil. At times (in the past) they also bought some of the North Sea stream, they could also go back to them," Bansal said.
Reliance did not immediately respond to a Reuters' request for comments.
"Reliance has the flexibility and trading know-how to revert to pre-Ukraine war procurement, so they may agree to change sourcing," said Harry Tchilinguirian, group head of research at Onyx Capital Group.
Indian state refiners paused Russian purchases in late July, Reuters reported, though Reliance continues to buy under a 500,000 bpd deal signed with Russia's Rosneft last year.
The port of Sikka in western India, which handles Reliance imports, is scheduled to receive 22 cargoes from Russia this month, LSEG data shows.
The state refiners were responding to threatened tariffs from Trump.
On Wednesday the United States imposed an additional 25 per cent tariff on imports from India, citing its continued purchases of Russian oil. That was to take effect in 21 days and would raise duties on some Indian imports to as high as 50per cent.
It has defended its purchases from Russia, which accounted for 35per cent of its supply in the first half of 2025, on economic grounds, and criticised the US and the European Union for singling out New Delhi.
Reliance, which is controlled by billionaire Mukesh Ambani, said in its annual report on Thursday that political and tariff-related uncertainties could hurt trade flows and the demand-supply balance.