India's largest private refiner Reliance Industries Ltd relied on diversified crude sourcing and operational agility to navigate a volatile energy market during the last quarter of FY26, marked by geopolitical disruptions and sharp cost swings.
After the Iran war disrupted oil and gas flows from Gulf countries, Reliance, which operates the world's largest oil refining complex at Jamnagar in Gujarat -- tapped non-Persian Gulf suppliers to replace barrels lost due to the conflict, according to an investor presentation the company made post fourth quarter earnings announcement.
"Persian Gulf loading contracts were replaced to minimise run cut," it said. "Crude sourcing diversified from multiple geographies." Reliance said it "worked with Middle East suppliers on alternative routing for stranded crude." It, however, did not elaborate.
Global crude markets remained largely oversupplied through most of the 2025-26 fiscal year, even as sanctions by the US and EU on Russian oil tightened before easing in March 2026. At the same time, structurally tight refining capacity and stronger-than-expected demand growth of about 0.8 million barrels per day in calendar 2025 drove a sharp rebound in fuel cracks.
However, downstream chemicals came under pressure due to oversupply, while prolonged conflict in the Middle East towards the end of the year triggered supply chain disruptions and dislocation in energy markets.
Against this backdrop, Reliance moved quickly to secure feedstock and sustain operations. The company replaced Persian Gulf loading contracts to avoid refinery-run cuts and worked with suppliers in the region to reroute stranded crude. It also diversified sourcing across geographies and ensured feedstock security for both refinery-linked and ethane-based operations.
The company said it prioritised domestic supplies, diverting products to the local market to maintain availability amid disruptions, while also optimising logistics and freight costs through cargo aggregation and flexible service mix.
The March quarter saw one of the sharpest shocks to energy markets, with constrained availability pushing physical crude prices to record highs and sharply increasing premiums, freight and insurance costs.
This, along with the reintroduction of the Special Additional Excise Duty (SAED), weighed on margins for domestic fuel sales.
Reliance responded by diverting propane and butane streams to boost LPG output and allocating KG-D6 gas to priority sectors. It also recalibrated its fuel mix, increased gasifier output and optimised grid power sourcing to reduce costs.
Looking ahead, Reliance expects energy markets to remain volatile amid geopolitical risks and trade tensions. Global oil demand is projected to decline marginally in 2026, while refining capacity additions are likely to remain constrained.
Fuel cracks are expected to stay elevated in the near term before easing gradually as supply normalises. Policy risks, including potential price controls and duties such as SAED, could continue to weigh on margins.
The company said its high-complexity refining system, diversified sourcing strategy and focus on maximising value across the chain would remain key to sustaining performance in a challenging environment.
Published on April 26, 2026