RIL diversifies crude sourcing, redirects exports amid Middle East disruptions

What happened

Reliance Industries diversified crude sourcing across Latin America, North America and the Mediterranean, redirecting light distillate exports to East and South Africa and middle distillates to Europe, Latin America and West Africa, as it navigated Middle East supply disruptions, including at the Strait of Hormuz.

Confirmed

Global impact / market context

Sourcing crude from more regions and routing fuel exports to higher-paying markets helped Reliance keep refineries running and capture strong refining margins, which means profit from turning crude into fuel. This reduces dependence on one shipping route and supports revenue and earnings when that route is disrupted.

Analyst inference

Freight rates rose 15 to 20 times and Arab Gulf crude price gaps widened, raising costs for refiners relying on that region. Average Brent crude rose 41 per cent year on year to $97 per barrel, a backdrop that lifted refining margins and rewarded companies able to secure alternative supply.

Analyst inference

What to watch

1. Whether Reliance continues to report record crude processing levels in the second quarter of FY27 and whether O2C segment revenue, up 44 per cent year on year to ₹2,31,601 crore, holds at that scale. Confirmed
2. Whether shipping costs stay elevated: freight rates jumped 15 to 20 times, and if they persist, the extra transport expense could offset some gains from buying crude outside the Middle East. Analyst inference
3. Watch whether Reliance extends its diversified crude sourcing and redirected export routes beyond this quarter, which would signal a lasting change in how it buys crude and where it sells fuels. Proposed

Evidence

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