India’s Reliance Industries Ltd. has shifted most of its oil traders from Mumbai to Dubai, executing a plan announced in 2021, but which now coincides with the city’s growing stature as a commodities hub after Russia’s war in Ukraine.
(Bloomberg) — India’s Reliance Industries Ltd. has shifted most of its oil traders from Mumbai to Dubai, executing a plan announced in 2021, but which now coincides with the city’s growing stature as a commodities hub after Russia’s war in Ukraine.
Most of the refiner’s oil procurement and trading are now conducted out of the United Arab Emirates’ biggest city, said people familiar with the matter, asking not to be named as they’re not authorized to speak publicly.
While Reliance’s ambitions in Dubai predate Russia’s war, its presence in what has been dubbed new Switzerland means it can more conveniently utilize the growing number of trading, logistics and financing services established to facilitate flows of Russian crude and oil products to buyers, said traders.
A spokesperson for Reliance Industries declined to comment when contacted on the matter.
India and China have become key consumers of discounted Russian crude after most others shunned the OPEC+ producer’s barrels following the invasion of Ukraine. A flood of oil merchants, middlemen, financiers and shippers have relocated to Dubai since last year after Western sanctions made it harder for them to handle Moscow-related deals in hubs such as Switzerland and Singapore.
Reliance is among Indian refiners that have already used United Arab Emirates dirham to pay for some shipments of Russia crude, people familiar with the matter said last month, as Russia encourages a shift away from the dollar. Payments vary from cargo to cargo, they added.
Russian-linked companies such as Litasco SA, an arm of energy giant Lukoil PJSC, moved some of its operations to Dubai from Geneva and Singapore, while Rosneft PJSC and Gazprom Neft PJSC were also in different stages of exploring a presence in the Middle Eastern city.
Reliance has ramped up its purchases of Russian crude, naphtha and fuel oil since the war. The Indian refiner, controlled by billionaire Mukesh Ambani, formed its wholly-owned subsidiary — Reliance International Ltd — two years ago, to trade petroleum, petrochemicals and agricultural products in Dubai. The company also has a trading presence in Singapore.
–With assistance from Anthony Di Paola.
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