US Secretary of State Marco Rubio is currently on a tour of India and reached the Mukesh Ambani-owned Reliance refinery in Jamnagar, Gujarat on Wednesday.
The world's largest oil refinery, owned by Reliance Industries, located on the west coast of India, takes crude oil from countries including Russia and Venezuela and refines it and ships the finished fuel to global markets. This helps in continuing the supply of fuel by avoiding crises arising in the Middle East.
The Trump administration is trying to reduce the rising prices of diesel globally. Rubio's visit is taking place at a time when fuel prices have risen sharply due to the war in Iran and the blockage in the Strait of Hormuz. This has become a big issue before the US midterm elections to be held next month.
Rajeev Lala, director of upstream strategy at S&P, told the British newspaper Financial Times, "The US needs diesel, and that too quickly. Refineries located on India's west coast can meet this need."
Rubio told reporters in Mumbai on Tuesday that India is a "refining superpower" and can help ease the pressure on the market.
When asked why the External Affairs Minister was going to meet the head of an oil refinery, he said, "You have a company which has a huge oil refining capacity. I think I should go and talk to them."
US President Donald Trump's son Donald Trump Jr. visited Jamnagar in November last year, while his daughter Ivanka Trump and her husband Jared Kushner attended the grand three-day celebrations ahead of the wedding of Ambani's son Anant in Jamnagar in 2024.
The Financial Times wrote, "India may be a big importer of crude oil, but its private sector refineries, especially Reliance, are currently earning huge profits by producing and exporting diesel. The reason for this is the shortage of refined fuel due to the global energy crisis.
Sumit Ritolia, chief refining analyst at data provider Kpler, said diesel's 'crack spread', the difference between the wholesale price of the fuel and the cost of crude oil required to make it, is currently around $63 per barrel. This is three times more than the level before the war.
Diesel production is also expected to increase. According to Ritolia, India's diesel exports may increase to about 7.30 lakh barrels per day in October, which was 6.53 lakh barrels per day a year ago. Reliance's share in this is estimated to be around 5.50 lakh barrels per day.
He said, "It is not that after Rubio's visit, diesel production in Jamnagar will increase two-fold or four-fold. Jamnagar is already working at its maximum capacity, because when such good profits are being made, who would not want to produce?"
Last week the Indian government gave another relief to exporters. The government almost halved the tax on diesel exports. It was reduced from Rs 16 ($0.16) per liter to Rs 8.50 per liter.
Purpose of Jamnagar visit
What is Rubio's Jamnagar agenda? In response to this question, he said in an interview with CNN News 18, "Reliance is a very important company and it has tremendous capacity to refine energy. Petroleum is useless unless it is refined and converted into a usable product.
Rubio said, "We think Reliance can further help India diversify its supply chain and energy supply." For example, Venezuela is increasing its energy production and India has long experience in refining some of its crude oil.
But Reliance is also among the few companies that have invested in refining capacity in America. It has invested in increasing refining capacity within the US. So, since we were so close, it felt like we should go see his operation and spend some time with him and talk about how we can work together better.
Venezuela's US-backed interim government is trying to increase oil exports to bring the country's troubled economy back on track. This development has come to light after the capture of revolutionary socialist leader Nicolas Maduro during an American commando operation in January.
Kpler's Sumit Ritolia told FT that America is the largest buyer of Venezuelan crude oil, while India is in second place. In recent months, India imported about 2.90 lakh barrels per day of crude oil from Venezuela, of which 90 percent came to the Jamnagar refinery.
This month, Trump signed an agreement with Putin, under which Russian diesel will be launched in the global market.
After this, last week Trump exempted up to 100 percent tariff on those buying Russian oil. The US Congress had approved these tariffs to put pressure on Moscow. India was worried by this step, because it is a big buyer of Russian crude oil.
Michael Kugelman, senior fellow for South Asia at the think tank Atlantic Council, writes on His current journey appears more solid. In this, direct talks are taking place on issues like security, energy and investment. There has been tension between the two countries regarding these issues, but there is also a long record of cooperation in these matters.
America changing stance
American media outlet Bloomberg wrote in its report, "India's oil supply sources, and especially Reliance's oil purchases, have previously been at the center of challenges related to Trump's geopolitical strategy."
Last year, when the US administration was trying to put pressure on Moscow over the Ukraine war, administration officials indirectly targeted Reliance and its owner Mukesh Ambani over their dependence on Russian oil.
Rubio's visit is taking place at a time when Washington and New Delhi are said to be close to finalizing a trade deal after more than a year of talks. America's share in India's total exports is about 20 percent.
When reporters at the White House on Tuesday asked President Donald Trump about the prospects for a deal, he said, "They want to make a deal. We will make a deal. Yes, we are very close."
The President said it "could be a very different kind of deal", but did not elaborate.
This year Russia still remains India's largest oil supplier. According to Bloomberg, oil supply from Russia has increased to a record level of about 2 million barrels per day, which is about 40 percent of India's total oil imports. Before Russia's attack on Ukraine in 2022, this share was barely two percent.
Bloomberg has written, “Oil supplies from Venezuela to India have also reached their highest level since 2019, although the quantity is much less, about 1.87 lakh barrels per day. At the same time, the supply of oil from America to India has almost halved to 1.65 lakh barrels per day. The reason for this is the increasing cost of freight transportation, which has reduced the competitiveness of American oil.
Jamnagar tour, what experts say
While India's energy potential is being credited for Rubio's visit to Jamnagar Refinery, it has also sparked a debate.
International relations expert C. Rajamohan wrote in an article in the Indian Express that this visit is more important than the general discussion on India-US relations.
He wrote, "Jamnagar provides an opportunity to understand India's complex energy politics. It is this energy politics that has shaped Delhi's relations with Washington, Moscow and Tehran in recent times."
"Rubio's meetings with representatives of Tata and Adani groups in Mumbai and talks with Mukesh Ambani in Jamnagar also show that there is a growing connection between the Indian business community and the country's foreign policy. As Indian companies grow their economic influence and reach around the world, they are becoming an important part of India's diplomacy."
However, in response to this, former Foreign Secretary of India and former diplomat Kavanal Sibal wrote on X, it is right in the article that India's big business groups can prove to be important for the country's foreign policy.
"But these business groups should not be allowed to become so powerful that they start controlling politics and government policies. This is seen in the case of military-industrial nexus in America."
"The relaxation given by America in sanctions on Russian diesel will be reviewed after 60 days. This statement of Rubio gives us some relief, but there remains uncertainty about the future situation."
"This is a strategic decision taken in view of the US midterm elections. The current US administration has shown time and again that it can change its stance."
Last Friday, well-known columnist Pratap Bhanu Mehta also wrote in an article published in the Indian Express, "This (relationship with India) has become just a mix of corporate interests."
Jamnagar Refinery
Jamnagar refinery is among the top three companies refining Russian Ural crude oil.
It was started in 1999 and was expanded in 2008.
It is the world's largest single-site refining complex, with two separate units for export and domestic markets.
According to the website named Click Oil and Gas, this refinery complex is unique not only in terms of capacity but also in terms of its area. Its area is 30 square kilometers, which is larger than any medium-sized Brazilian city.
According to Climate Trace, an environmental organization, "The Jamnagar Refinery Complex is spread over an area of more than 7,500 acres. Its capacity to process 1.4 million barrels of crude oil per day is more than double the capacity of North America's largest Galveston Bay Refinery in Texas."
