Reliance Suspends Venezuelan Crude Imports
Reliance Industries Ltd., India’s largest privately owned refiner, has paused further purchases of Venezuelan crude oil following an executive order by U.S. President Donald Trump imposing a 25% tariff on nations importing oil from the South American country.
Pending Delivery and Future Imports
According to sources familiar with the matter, Reliance is expected to take delivery of a cargo of Merey crude currently en route from Venezuela. However, additional purchases have been put on hold due to the looming tariff, which takes effect on April 2. The sources, who requested anonymity due to the sensitivity of the situation, indicated that Reliance had previously obtained waivers from the U.S. to resume Venezuelan crude imports. Since the start of the year, the refiner has received an estimated 6.5 million barrels, according to data from Kpler.
Reliance’s Official Response
Reliance has yet to issue an official response regarding its future import strategy, as a company spokesperson did not immediately respond to requests for comment.
Shift in Crude Sourcing Strategy
Indian refiners, including Reliance, have occasionally sourced Venezuelan crude through third-party traders rather than purchasing directly from the country. However, the availability of cheaper and more accessible Russian crude has made it a preferred alternative. Reliance remains a major buyer of Russian oil as well.
China’s Role in Venezuelan Crude Imports
China has been Venezuela’s largest crude oil customer, accounting for more than 40% of its exports in February. While China’s private refiners, which handle most of this sanctioned crude, may temporarily reduce purchases due to increased scrutiny, experts suggest that the flow of Venezuelan oil is unlikely to cease entirely.
Reliance’s Refining Capabilities and Impact of Tariffs
Reliance, which operates the world’s largest refining complex in Gujarat, has been importing an average of 2 million barrels of Venezuelan crude per month, according to LSEG data. Trade flow records show the company is scheduled to receive a Venezuelan cargo in early April. However, three industry sources indicated that Reliance would suspend future imports due to the potential tariff impact.
Status of April Cargo and Shipping Delays
Uncertainty remains regarding the status of the April cargo, with one source suggesting the company is still assessing its options. Meanwhile, Venezuelan heavy crude shipments have already slowed at the country’s main oil ports following the U.S. announcement.
Refining Operations and Alternative Crude Sources
Reliance’s refining facilities, with a combined processing capacity of 1.4 million barrels per day, are well-equipped to handle heavier and cheaper crude grades, such as Venezuela’s Merey. However, given the tariff’s potential cost implications, the company is expected to explore alternative crude sources to maintain its refining operations efficiently.
