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Reliance Industries of India warns that tariff uncertainty could affect trade flows

Reliance Industries, India’s largest buyer of Russian crude oil, stated in its annual report published on Thursday that geopolitical uncertainties and tariff-related uncertainty could affect trade flows and demand-supply equilibrium.

The operator of the largest refinery complex in the world said that crude prices remained volatile despite evolving sanctions, changing tariff policies and production decisions made by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC member countries.

The report did not go into detail about the tariffs. It covered the fiscal years up to March 2025. This was before U.S. president Donald Trump increased pressure on India by imposing an additional 25% tariff Wednesday on goods imported from that country because of its energy ties with Russia.

The new tax, which is meant to penalise India for its Russian imports of oil, comes on top existing tariffs Washington levied in order to correct its trade deficit with New Delhi.

Trade data show that Russia continued to be India's largest oil supplier during the first half of 2025. It accounted for 35% of New Delhi’s total supplies. Iraq, Saudi Arabia and the United Arab Emirates were the next three suppliers.

Private companies Reliance Energy, Nayara Energy and HPCL Mittal Energy have continued to purchase Russian oil despite the suspension of imports by state refineries.

In the largest energy deal ever between Russia and India, Rosneft, the state-owned oil company of Russia, agreed to supply Reliance with nearly 500,000 barrels of crude per day.

If we give in to pressure, we could lose access to Russian crude that is cheaper, which would squeeze the margins of refineries. Pramod Gubbi said that additional U.S. duties would be a risk to Reliance as well as oil marketing companies.

Reliance shares dropped 1% on Thursday, before trimming their losses to close at 0.2% lower.

The shares of oil marketing companies, including Indian Oil Corp, closed between 0.4% to 2% lower.

The European Union also banned the import of refined petroleum products manufactured from Russian crude that was processed in a third country, with a few exceptions.

The United States has sanctioned the privately-owned refiner Nayara Energy, which is backed by Russia.

According to LSEG data, Reliance, a major refinery exporter, shipped 2.83 million barrels per month of diesel fuel and 1.5 million barrels per month of jet fuel to Europe during the first seven months this year. Sethuraman NR reported from New Delhi and Hritam Mukherjee from Bengaluru. Mrigank Dhaniwala edited the story.

(source: Reuters)