Reliance Industries Ltd has consistently remained compliant with international sanctions and is expected to adhere to upcoming measures on Russian oil, analysts said, estimating that oil sourced from Russia contributes just 2.1 per cent to its consolidated EBITDA.
Reliance operates the world’s largest single location refining complex, with more than half of the capacity exclusively dedicated for exports. It is also India’s biggest user of Russian oil.
In July, the European Union approved its 18th sanctions package in response to Russia’s ongoing war in Ukraine. It lowered oil price cap to $47.60 per barrel from $60, for cargo to avail of western shipping and insurance services, as well as banned import of refined petroleum products derived from Russian crude, including those refined in third countries, beginning January 2026.
Reliance’s Jamnagar refinery complex, which includes a 35.2 million tonnes a year unit dedicated only for exports, sells fuels like diesel to EU and other nations.
Stating that Reliance has been compliant with western sanctions, Jefferies in a note said the company “has adhered to western sanctions on Iranian and Venezuelan crude and is likely to comply in the event of sanctions on Russian crude, in our view.”
Like other Indian refiners, Reliance increased the purchase of Russian oil post the Ukraine war in February 2022. This because Russian oil was available at a discount because of the EU price cap and some western nations shunning purchases to punish Moscow for its invasion of Ukraine.
Estimating a $1 per barrel benefit from refining Russian oil, the brokerage said Russian grade Urals headline discount to Brent has varied between $4 and 7 per barrel over the past 15 months with landed discounts prevailing at $3 given higher logistics and insurance costs.
“This translates to $1.0-1.2 per barrel of incremental margin on Reliance’s refinery throughput, in our view,” it said, adding annually this would mean around $500 million of EBITDA or 2.1 per cent of consolidated pre-tax earnings.
“The benefit of Russian crude is limited to 2.1 per cent of consolidated FY27 EBITDA, in our view,” Jeferries said.
Previously, Hong Kong-based CLSA, too, had made a similar estimation of limited benefit from using Russian oil.
US officials have been in recent weeks targeting India for its import of Russian oil saying New Delhi was funding Russia’s war machine and profiteering off Russian oil.
CLSA in its report titled ‘Russian crude imports – the real math’ on August 28 mentioned that the “net annual benefit to India from Russian crude imports to be much smaller at just $2.5 billion or a small 6 bps of India’s GDP”.
This is significantly lower than the speculative number of $10 billion – $25 billion benefit being quoted.
While the Russian crude oil price was capped at $60, when the Brent crude oil traded at $75, the entire differential of $15 a barrel was not India’s gain.
The CLSA report explained, “However, the net gain to Indian importers is far smaller than this visible discount as there are several shipping, insurance and reinsurance related restrictions for Russian crude. Therefore, Indian refiners import Russian crude on a cost, insurance and freight (CIF) basis, landed in India. Thus, the landed price of Russian crude is at a far lower discount.”
The discount on Russian crude has been steadily declining. The discount averaged around $8.5 per barrel in FY24, which fell to $3-5 in FY25 and has declined to about $1.5 per barrel last month.
The net gains estimated at $2.5 billion for FY25 have gone down even further in the last few months. According to CLSA, at current discounts, the annualised gains from this import to just $1 billion.
Published on September 5, 2025