en.Wedoany.com Reported - Reliance Industries Limited (RIL) increased its crude oil purchases from Russia and Latin America in the June quarter to reduce its dependence on Arabian Gulf (AG) crude. The company is facing global energy market turmoil triggered by the closure of the Strait of Hormuz and disruptions in the supply chain.
The company stated that diversifying its crude sources and increasing purchases from Russia and Latin America helped reduce reliance on AG crude, as part of its operational strategy for the quarter. RIL also completed planned maintenance of its crude distillation unit (CDU) and coker, while extending operating hours of secondary units to minimize the impact of reduced throughput.
This shift in procurement strategy comes amid Middle East conflicts disrupting global crude markets. RIL noted that after the closure of the Strait of Hormuz, the average Brent crude price for the quarter was $104.5 per barrel, up $36.7 per barrel year-on-year. The closure disrupted an estimated 13 million barrels per day of crude supply, tightening the global oil market.
Despite challenges, the company's petrochemical business (O2C) EBITDA grew 17.2% year-on-year to INR 170.1 billion. The performance was driven by stronger transport fuel crack spreads and improved downstream petrochemical margins. RIL said that crude basket diversification, efficient product placement in a supply-constrained market, and favorable ethane cracking economics also positively impacted results.
RIL warned that multiple headwinds limited gross margin capture, including high crude premiums for physical barrels and higher freight and insurance costs. The company added that diverting propane and butane to increase LPG production and stabilizing domestic retail fuel prices to protect consumers led to losses in the fuel retail business. The reimposition of a special additional excise duty (SAED) on diesel, gasoline, and aviation turbine fuel also weighed on domestic margins.
Chairman and Managing Director Mukesh Ambani said the O2C business performed strongly in the quarter, driven by historically high middle distillate crack spreads and improved downstream petrochemical margins. He noted this was achieved against the backdrop of a challenging global energy market with supply chain disruptions. The company responded to the environment with operational flexibility while ensuring adequate supply of essential domestic fuels and materials.
At the group level, Reliance Industries reported O2C business EBITDA of INR 170.1 billion, with consolidated revenue for the June quarter up 24.5% year-on-year to INR 3.4 trillion.
