Reliance to sell some April-loading crude cargoes in a rare move: Report

In a rare move, Reliance Industries is seeking to sell some its April-loading crude oil cargoes from Middle East as it plans to cut crude processing after the coronavirus pandemic hit global fuel demand, sources told Reuters on Friday.

The move comes as refiners across the world are considering deeper run cuts as their plants witness heavy losses, mostly because of the measures taken by governments to prevent the virus from spreading have slashed fuel consumption.

Mukesh Ambani's Reliance has offered various grades of Middle East crude for sale in Asia's spot market, including grades such as Abu Dhabi's Murban crude and Qatar's al-Shaheen crude, the sources said.

Reliance is also seeking to sell cargoes already at sea as the government has stopped export of crude oil. By selling the crude, Reliance hopes to avoid demurrage costs especially as freight rates have risen, said a source.

The company did not respond to a request for comment.

Reliance operates the world's biggest refining complex with capacity to process 1.4 million barrels per day (bpd) of oil at Jamnagar in Gujarat. "As of now, the plan is to cut refining throughput in April because demand is not there," the source said. The company is also reportedly in talks with producers to defer some cargoes.

Reliance's two advanced refineries, situated next to each other, have the capability to process some of the toughest cheaper grades available in the market.

The refiner sells most products from the 660,000 bpd refinery that focuses on the domestic market through its own retail stations and by sale to state fuel retailers, which dominate India's fuel retail market.

India introduced a 21-day lockdown that began on Wednesday to stem the spread of coronavirus in the country, leading to a drastic fall in local fuel demand. Several refiners have cut refining processing due to the lockdown.

Reliance's other 704,000 bpd plant exports products to overseas markets, where demand is also hit as nations restrict the movement of people to prevent the virus from spreading.

 

 

(Reporting by Florence Tan in Singapore and Nidhi Verma in New Delhi; Editing by Mark Potter and Susan Fenton)