India’s Reliance Industries considers divesting from Russian fuel
India’s Reliance Industries, operator of the world’s biggest refining complex, could avoid buying Russian fuels for its plants after the West imposed sanctions on the country following its invasion of Ukraine.
Speaking at the Asia Refining and Petrochemical Summit, Rajesh Rawat, senior vice president said: “Even if we can source some of the feeds from Russia, probably we will be out of it because of the sanctions.”
Sanctions on Russia have prompted many companies and countries to shun its oil, depressing Russian crude to record discount levels.
While India has so far avoided imposing sanctions Russia – with its government weighing up a discount deal for its oil supplies – companies engaging with Western financial institutions fear unwittingly violating sanctions or suffering reputational harm.
Rawat said: “So probably, those feed streams will still continue, or may have a lesser impact compared to the private sector players. Because we deal with banks, and also even if we can source some of the feeds from Russia, probably we will be out of it because of the sanctions.”
Reliance typically buys Urals crude and straight run fuel oil for its refineries from Russia, although it mostly petrochemical feedstock from the Middle East and the United States.
Over the past few weeks – Russian crude has been trading at an over $20 discount to Western competitors, but has still struggled to find buyers.
Rawat argued that, in India, most of the oil supplies from Russia are going to state-run companies.
In contrast to privately backed Reliance, India’s top refiner and government supported Indian Oil has bought 3m barrels of Russian Urals crude, while Hindustan Petroleum has bought 2m barrels of the oil through tenders.
So far, multiple energy giants have exited the Russian market this month including BP, Shell and ExxonMobil.