Time-tested, diversified crude sourcing strategy to ensure stability, reliability: RIL

Reliance Industries said late on Friday that it is confident its time-tested, diversified crude sourcing strategy will continue to ensure stability and reliability in its refinery operations, meeting domestic and export requirements, including to Europe.

“As is customary in the industry, supply contracts evolve to reflect changing market and regulatory conditions. Reliance will address these conditions while maintaining the relationships with its suppliers,” read the statement from Reliance Industries. The Mukesh Ambani-led company said it remains fully committed to maintaining its longstanding record of adherence to applicable sanctions and regulatory frameworks and will adapt its refinery operations to meet compliance requirements.

Reliance also said that it is currently assessing the implications, including the new compliance requirements, in light of the recent restrictions announced by the European Union, the United Kingdom and the United States on crude oil imports from Russia and export of refined products to Europe. 

“We will comply with the EU’s guidelines on the import of refined products into Europe. Whenever there is any guidance from the Indian Government in this respect, as always, we will be complying fully. Reliance has consistently aligned itself with the objectives of ensuring India’s energy security,” the statement from Reliance added.

Reliance Industries had earlier complied with sanctions imposed on Iran. RIL earlier confirmed that it will recalibrate its oil imports from Russia in line with the Indian government’s guidelines. However, the impact of halting Russian crude imports will not be as severe as expected, an executive at a public-sector company told Fortune India earlier. “The margin of $5-6 per barrel is set off against high freight rates from Russia and the high insurance premiums,” he added. The actual benefit of Russian crude is around $2-3 a barrel, another executive confirmed. 

The stakes are high as stopping Russian crude will affect fuel prices in India. The energy security, refinery profitability, and even macroeconomic stability are tied to how the country navigates this diplomatic and economic tightrope. India stands to lose financial benefits of $3.2 million to $6.4 million every day if it stops importing crude oil from Russia. Experts in the oil and gas sector told Fortune India that India currently imports 1.6 to 1.7 million barrels of Russian oil per day, accounting for around 30% of the country’s total crude import value — the highest from any single nation.