RIL shares hit new high; analysts see gains from US move on Venezuela oil

Shares of RIL rose over 1 per cent as analysts expect the company's oil business to gain from the US capture of Venezuela's oil

Shares of Reliance Industries Ltd. (RIL) rose over 1 per cent to hit a fresh record on Monday after analysts expect the conglomerate's oil business to gain from the US capture of Venezuela's oil industry. 

 

The oil-to-telecom conglomerate's stock rose as much as 1.2 per cent during the day to a new high of ₹1,611.8 per share, the biggest intraday rise since Jan 1 this year. The stock pared gains to trade 0.3 per cent higher at ₹1,599 apiece, compared to a 0.03 per cent decline in Nifty 50 as of 9:55 AM. 

 

Shares of the company rose for the fourth straight session and currently trade at 1.7 times the average 30-day trading volume, according to Bloomberg. The counter has risen 31 per cent in the last 12 months, compared to a 11 per cent advance in the benchmark Nifty 50. RIL has a total market capitalisation of ₹21.6 trillion.  FOLLOW STOCK MARKET UPDATES TODAY LIVE

 

Reliance to gain from US take over of Venezuelan oil 

A US takeover of Venezuela's oil industry could be beneficial for Reliance Industries and ONGC, analysts at Jefferies said in a report. This could mean the lifting of sanctions on Venezuelan crude sales, which would help Reliance buy heavy crude at a discount to Brent, and aid the firm’s gross refining margins, the report added. 

 

Over the weekend, US forces carried out a large military operation in Venezuela, capturing President Nicolas Maduro and his wife and taking them to the US to face various charges, including narco-terrorism and drug trafficking.    India was a major buyer of Venezuelan crude in the 2000s and 2010s. However, as bilateral engagement weakened sharply since 2019 due to US sanctions, which forced India to cut oil imports and scale back commercial activity to avoid secondary sanctions. In FY2025, India's total imports from Venezuela were just $ 364.5 million, of which crude oil accounted for $ 255.3 million, an 81.3 per cent drop from $ 1.4 billion in crude imports in FY2024, as per a PTI report.    Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said the stability in global oil prices, along with higher capacity utilisation driven by improved crude supply, could be positive for RIL in the short to medium term. He added that any increase in supply through smoother global supply chains would support refining margins and overall performance.  

  However, Bathini cautioned that investors should closely track how geopolitical developments unfold over the next few weeks, as well as movements in global crude prices. “At this point, oil prices are largely expected to remain stable within the current range,” he said, adding that it is still premature to speculate on sharp moves.

 

Bathini said any decline in RIL shares should be viewed as a buying opportunity, while existing investors can continue to hold the stock.   Meanwhile, Jefferies said that ONGC has not received its share of dividends from production at the San Cristobal project, amounting to more than $500 million. With the US stepping in, the company may be in a position to recover these unpaid dues, the brokerage said.

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RIL to maintain its financial flexibility 

India Ratings and Research (Ind-Ra), in a recent report, said it expects RIL to maintain its superior financial flexibility due to its high cash flow generation, large cash reserves, and proven access to capital markets. 

 

The rating agency also expects continued strong cash flow generation from existing consumer facing and oil-to-chemical (O2C) business verticals to keep credit ratios healthy, even as RIL embarks on its investment drive in new age businesses.

 

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