RPT-BREAKINGVIEWS-Reliance walks fine line on Russia-US energy

By Shritama Bose

MUMBAI, July 16 (Reuters Breakingviews) - India's largest company might help to grease its trade deal with the world's biggest economy. U.S. President Donald Trump's threat to impose secondary sanctions on buyers of Russian exports within 50 days may look awkward for the $234 billion Reliance Industries RELI.NS, which signed a 10-year deal to buy cut-price crude from Moscow-headquartered Rosneft ROSN.MM just seven months ago. But Mukesh Ambani's conglomerate is deftly marrying commercial value with New Delhi's geopolitical goals.

Trump's aggressive stance towards the Kremlin gives the U.S. a timely lever in tariff talks with the South Asian country. India is the second-largest buyer of Russian crude behind China and the main client for its flagship Urals oil. Its imports from Moscow climbed to their highest in 11 months in June, Press Trust of India reported, citing data from commodity tracking firm Kpler. Jefferies analysts reckon it accounts for up to 35% of Indian crude imports.

Yet for Reliance, as well as India, the gains from Moscow's discounted crude are anyway fading. Discounts on Russian Urals bound for Indian ports in July hit their narrowest levels since 2022, Reuters reported, citing unnamed traders, partly on greater demand from Turkey, which tightened supply.

Elsewhere, the company has spotted an opportunity in absorbing U.S. supplies of ethane after Washington required its exporters to seek licences to ship to top buyer China. A tanker loaded with U.S. shale gas headed to India in June, the final buyer of which, Reuters reported citing Kpler data, was Reliance; it was the first time the vessel had journeyed anywhere other than the People's Republic since 2022. That should favour New Delhi in trade talks with Washington.

Oil markets are discounting Trump's sanctions threat, but Ambani doesn't have to worry too much even if they prove wrong. Reliance's Jamnagar refinery is one of the world's most complex, allowing it to lucratively process a wide variety of crude: the company logged a gross refining margin of 860 rupees ($10) for the year to the end of March 2025, 34% higher than state-backed rival Oil and Natural Gas Corporation ONGC.NS, per analyst estimates on Visible Alpha. Reliance is in a strong position whichever way the geopolitical winds blow.

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CONTEXT NEWS

U.S. President Donald Trump threatened sanctions on buyers of Russian exports unless Moscow agrees a peace deal within a 50-day grace period, Reuters reported on July 14.

“We’re going to be doing secondary tariffs,” Reuters cited Trump as saying. “If we don’t have a deal in 50 days, it’s very simple, and they’ll be at 100%.”

A White House official said on July 14 that Trump was referring to 100% tariffs on Russian goods as well as secondary sanctions on other countries that buy its exports.