Reliance Industries Could Gain Rs 12,600 Crore from Venezuelan Crude

Reliance Industries Limited (RIL) is projected to potentially increase its annual operating profit by up to Rs 12,600 crore due to the intake of Venezuelan crude, as reported by YES Securities. The brokerage anticipates that enhanced processing capabilities at RIL's Jamnagar refinery could add between $2 to $3 per barrel to the company's blended gross refining margin. With an estimated annual crude throughput of around 70 million tonnes, this could translate into a significant increase in EBITDA for the company's oil-to-chemicals (O2C) segment.

Historically, Reliance has leveraged its access to discounted Venezuelan heavy crude, which has been a cornerstone of its refining advantage. The Jamnagar facility is uniquely equipped to process complex crude grades, including Venezuelan Merey-16, which is characterized by its high sulfur and metal content. This capability allows Reliance to convert heavy crude into higher-value products, maintaining a cost advantage over simpler refineries. Previously, Venezuelan crude contributed approximately $1.30 per barrel to RIL's margins due to its pricing discount.

The recovery of Venezuelan crude imports is notable, as RIL's intake has reportedly risen to between 250,000 and 420,000 barrels per day in 2026. This resurgence follows a period of significant disruption due to U.S. sanctions, which had drastically reduced Venezuelan crude availability from 2021 to 2023. The renewed flow of discounted Orinoco barrels is expected to restore some of RIL's raw material cost advantages, although the sustainability of these supplies remains uncertain and dependent on regulatory conditions.

The implications of this opportunity extend beyond RIL's immediate financials. A sustained increase in gross refining margins could enhance RIL's competitive position against domestic public sector undertakings (PSUs). The brokerage estimates that every $1 per barrel increase in RIL's gross refining margin could yield about Rs 4,200 crore in annual EBITDA. However, the actual benefits will hinge on the continued availability of Venezuelan crude and the refinery's operational efficiency.

Looking ahead, the key challenge for Reliance will be to ensure that the influx of Venezuelan crude remains stable and economically viable. Regulatory permissions and the ability to maintain high utilization rates at the Jamnagar facility will be crucial. If these conditions are met, RIL could see a significant recovery in its refining margins, contributing positively to its overall financial health amidst recent stock performance pressures.