RIL Shares In Focus As US Tightens Sanctions On Russian Oil — Why It Matters

Reliance Industries Ltd. shares will be in focus on Friday after the US tightened its sanctions regime against Russian energy exports to force Moscow into a ceasefire in Ukraine.

The Trump administration sanctioned Rosneft and Lukoil, which have a combined export of up to 3.1 million barrels per day out of Russia's total 3.8-3.9 mbpd shipments.

India is Russia's second-largest oil customer, just behind China. Since the Ukraine war started nearly four years ago, India has gone from sourcing just 2% of its energy needs in fiscal 2022 from Russia to 36% in FY25.

Moscow has provided sharp discounts on the international benchmark to Asian customers after Western countries shunned its supplies.

RIL is the top Indian importer with a share of 34%, followed by Indian Oil Corp. (16%) and Rosneft-owned Nayara Energy Ltd. (15%).

These sanctions are likely to impact RIL's crude imports; however, state-run refiners may continue purchases through intermediary traders for now, PTI reported on Thursday. As per the report, industry sources indicated that PSUs are assessing compliance risks but are unlikely to halt Russian crude flows immediately.

The Mukesh Ambani-led company had in December 2024 signed a term deal with Rosneft to import as much as 5,00,000 bpd of Russian oil for 25 years. It also buys oil from intermediaries.

The US sanctions now present an increased cost of replacing Russian crude. On a weighted average basis, Indian companies lose out on a discount of $1 per barrel. Every $1 increase in crude prices is expected to impact their operating income or Ebitda. Here's a breakdown:

• Indian Oil – 10%

• BPCL – 9%

• HPCL – 7%

• RIL – 2-2.5%

Notably, the curbs mark a U-turn for President Donald Trump, who had held off on major sanctions and announced earlier this month that he would meet Putin in Europe in the coming weeks. Washington has pressured India and China to cut Russian energy purchases to strain the Kremlin's finances and force a ceasefire in Ukraine.

Shares of RIL settled 1.2% lower at Rs 1,448 on the NSE on Thursday, compared to a 0.1% gain in the benchmark Nifty 50.

The stock has risen 8% in the last 12 months and nearly 19% so far this year.

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