Reliance Industries to review Russian oil imports amid US sanctions: Report

Reliance Industries Ltd, India’s largest buyer of Russian oil, plans to adjust its crude imports from Moscow to align with the Indian government’s directives, a company spokesperson said, after the United States and Europe tightened sanctions against the Kremlin.

"Recalibration of Russian oil imports is ongoing and Reliance will be fully aligned to GoI (Government of India) guidelines on the extent of recalibration," the company led by billionaire Mukesh Ambani said in response to a Reuters query on whether it plans to reduce crude purchases from Russia.

Also Read: US sanctions on Rosneft, Lukoil may impact Reliance's crude imports

Reliance explores alternative crude sources

Reliance, which operates the world’s largest refining complex at Jamnagar in western Gujarat, has a long-term agreement to purchase nearly 500,000 barrels per day (bpd) of crude oil from Russian energy company Rosneft. The refiner also sources Russian oil through intermediaries, Reuters reported.

In recent days, Reliance has purchased spot cargoes of crude from the Middle East and Brazil, which traders said could partly replace Russian supplies. According to a Reuters report quoting a Middle Eastern trader approached by Reliance, the company was seen in the market on Thursday (October 23), scouting for fresh supplies.

One of the Reuters sources added that even before the latest US sanctions, Reliance had been considering halting Russian oil imports for one of its export-oriented refineries, following the European Union’s ban on refined products derived from Russian crude, which takes effect in January.

Also Read: India won't accept humiliation: Putin slams US pressure over Russian oil trade

Indian refineries to scale back Russian oil imports

Indian state-run refiners, including Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp, are also reviewing their trade documents to ensure that no supplies originate directly from Rosneft or Lukoil after Washington sanctioned the two oil majors, a source told Reuters on Thursday.

India’s oil ministry and the state refiners did not immediately respond to requests for comment. Trade sources noted that state refiners rarely buy directly from Rosneft or Lukoil, as most purchases are made via intermediaries.

Indian refiner Nayara Energy, whose largest shareholder is Rosneft, also buys oil from the Russian state company. Nayara did not immediately respond to a request for comment.

"There will be a massive cut. We don’t anticipate it will go to zero immediately as there will be some barrels coming into the market via intermediaries," a refinery source told Reuters.

"It all depends on banks," another Indian refinery official said. "If banks clear payments then we will buy. Otherwise my intake will be zero."

Also Read: Trump reiterates claim that India will stop buying Russian oil by year-end

US sanctions Russian oil companies

US President Donald Trump on Wednesday (22 October) imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting oil producers Lukoil and Rosneft as his frustration with Russian President Vladimir Putin deepens over the war in Ukraine.

The move came after European Union member states approved a 19th package of sanctions on Moscow for its war in Ukraine, which also included a ban on Russian liquefied natural gas imports.

Also read: Testing time for India's foreign policy: Can Modi govt rise to the challenge?

Trump’s measures followed Britain’s decision last week to sanction Rosneft and Lukoil. The US Treasury has given companies until 21 November to wind down transactions with the sanctioned Russian oil producers, according to a release issued Wednesday.

Following Trump’s announcement, oil prices rose more than USD 2 a barrel, with Brent crude futures climbing to about USD 64, Reuters reported.