Indian company Reliance stops processing Russian oil at part of giant refinery due to US sanctions

Indian company Reliance Industries Ltd. announced the cessation of processing Russian oil at part of its giant Jamnagar refinery, as US sanctions force the company to avoid cooperation with Moscow, UNN reports with reference to Bloomberg.

DetailsThe export portion of the refinery, which accounts for about half of its 1.4 million barrels per day capacity, received its last shipment of Russian oil on Thursday, the company said in a statement.

The move will allow the plant to continue supplying fuel to Europe after new sanctions come into effect early next year, prohibiting the import of petroleum products made from Russian oil. It will also demonstrate compliance with US efforts to deter refiners from using Russian oil.

Reliance is not currently buying Russian oil and has not yet decided whether to resume purchases, a source familiar with the situation said on condition of anonymity because the information is not public. At the same time, the two plants in Jamnagar make it the world’s largest refinery.

However, the company said in its statement that some of the oil purchased before the US imposed sanctions on two major Russian oil companies would be unloaded at another part of the Jamnagar refinery, which supplies the domestic market, the company added.

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RecallThe US announcement of sanctions against PJSC Lukoil and PJSC Rosneft last month sent shockwaves through Asian oil buyers, as it meant that a significant portion of Russian supplies would be pumped by blacklisted companies. Refiners in India and China bought up cheap Russian barrels after the war in Ukraine, which mitigated the effects of rampant global inflation in 2022.

The deadline for winding down deals with these two companies expires on Friday, putting pressure on companies and countries that continued to buy barrels from Moscow after Russia’s invasion of Ukraine. Although Indian refiners have booked vessels for alternative cargoes in recent weeks, the impact of sanctions on oil prices has been relatively subdued, indicating a lack of panic in the market.

This week, Intercontinental Exchange Inc. said it would not allow diesel fuel from refineries serving ports that receive Russian oil to be used in the settlement process for January gasoil futures contracts on the ICE exchange.