Companies

Reliance seeks to sell Mideast crude cargoes in rare move

Reuters SINGAPORE/NEW DELHI | Updated on March 30, 2020 Published on March 30, 2020

Reliance is seeking to sell cargoes already at sea as Indian rules do not allow export of crude oil. Representative image   -  Reuters

Plans to cut refining output in April as virus hits demand

Reliance Industries Ltd is seeking to sell some April-loading crude cargoes in a rare move as it plans to cut crude processing after the coronavirus pandemic hit global fuel demand, four sources said. The move comes as refiners across the world are considering deeper run cuts at their plants on mounting losses as measures taken by governments to prevent coronavirus from spreading have slashed fuel consumption.

Reliance, controlled by Mukesh Ambani, has offered various grades of Middle East crude for sale in Asia's spot market, including grades such as Abu Dhabi's Murban crude and Qatar's al-Shaheen crude, the sources said. “Everything is possible if you are interested,” another source said.

Reliance is seeking to sell cargoes already at sea as Indian rules do not allow export of crude oil. By selling the crude, Reliance hopes to avoid demurrage costs especially as freight rates have risen, said a second source. The company did not respond to a request for comment.

Reliance operates the world's biggest refining complex with capacity to process 1.4 million barrels per day (bpd) of oil at Jamnagar in Gujarat. “As of now, the plan is to cut refining throughput in April because demand is not there,” the second source said. The company is also in talks with producers to defer some cargoes, the source said.

Reliance's two advanced refineries, situated next to each other, have the capability to process some of the toughest cheaper grades available in the market. The refiner sells most products from the 660,000 bpd refinery that focuses on the domestic market through its own retail stations and by sale to state fuel retailers, which dominate India's fuel retail market.

India introduced a 21-day lockdown that began on March 25 to stem the spread of coronavirus in the country, leading to a drastic fall in local fuel demand. Several Indian refiners have cut refining processing due to the lockdown. Reliance's other 704,000 bpd plant exports products to overseas markets, where demand is also hit as nations restrict the movement of people to prevent the virus from spreading.

Published on March 30, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.