The way America and Euro have imposed ban on Russian crude oil, the world’s largest refiner Reliance Industries has also become dependent on crude oil from Gulf countries. The special thing is that in the month of October, Reliance Industries has broken all the records of purchase of Gulf and American crude oil. Following the US ban on supplier Rosneft, the refiner last month halted purchases from Moscow and bought at least 12 million barrels of spot crude from the Middle East and the US, the ET report quoted sources as saying. Ha
Recently Reliance, which has a long-term contract to buy about 5 lakh barrels of crude oil per day from Russian major Rosneft, had said it would comply with Moscow’s sanctions while maintaining ties with existing oil suppliers. Britain, the European Union and the United States have imposed sanctions on Russia over the war in Ukraine, and new US sanctions have also been imposed on its two major oil producers, Rosneft and Lukoil. The United States has given companies until November 21 to stop dealings with Russian oil producers.
How much did Middle East supply increase?
Sources said that to compensate for Russian supplies, Reliance Industries Limited has purchased 1 million barrels of Abu Dhabi Murban crude, 2 million barrels of Upper Zakum and 5 million barrels of Qatar Land crude. He said that the company has also purchased 3 million barrels of Qatari Al-Shaheen and Khafji, 2 million barrels of Iraqi Basra Medium, 2 million barrels of Brazilian Tupi and Sapi crude, and 2 million barrels of American West Texas Intermediate crude. He said that Middle Eastern grade oil will be loaded in December, while Brazilian oil will be supplied in December. Sources said that WTI will reach Reliance’s Sikka Port in January.
Traders said Reliance may have bought even more commodities in deals that the market was not aware of. They estimate that in total he may have purchased about 16 million barrels of oil. However, no official statement has come from Reliance. A source in the media report said that perhaps they have bought more and we are deprived of incremental term supply, for example. He further said that refiners have probably sought more term supply from Saudi Aramco, Abu Dhabi National Oil Co., Kuwait Petroleum Corp. and Iraq’s SOMO.
Reliance preparing to resell
However, traders said that Reliance is offering to resell some of these cargoes. Traders said that Reliance has sold 1 million barrels of Basra medium crude to be loaded in December to a Greek refiner. It was not immediately clear whether Reliance had sold more cargo. A trader said Reliance has offered to sell Middle East cargo at prices lower than official prices. Another trader said it would be difficult for Reliance to resell Middle East crude at a profit due to high logistics costs and price cuts by producers this month.
Reliance has a big stake in Europe
The European Union had earlier said that from January 21 it would not accept fuel produced at refineries that received or processed Russian oil more than 60 days before the date of the bill of lading. Europe’s share in Reliance’s exports is 28 percent. Traders said Reliance, known as a swing supplier, has the advantage of getting the highest prices by selling its products in Asia, Europe, Africa or the Americas. Reliance, controlled by billionaire Mukesh Ambani, is the largest Indian buyer of Russian crude.