Deal done at $6/barrel discount, Reliance buys its first Canadian crude oil: Sources

• Follow

Reliance Industries Limited, owned by the richest man of India, Mukesh Ambani, is reportedly onto something new. According to Reuters, the prominent Indian refiner, has recently made a significant move in the global oil market. Sources say that Reliance has brought its first ever crude oil from trans mountain pipeline. They’ve purchased 2 million barrels of Canadian crude from Shell, a major energy company, with the delivery scheduled for July. This purchase is noteworthy because it marks Reliance’s first procurement of oil from Canada’s recently expanded Trans Mountain pipeline.

The Trans Mountain pipeline, operated by the Canadian government, underwent significant expansion to increase its capacity and facilitate the transportation of crude oil from Alberta’s oil sands to the Pacific coast of British Columbia. This expansion aimed to provide greater access to international markets for Canadian oil producers.

Reliance’s purchase of Canadian crude from the Trans Mountain pipeline underscores the interconnectedness of the global oil market and highlights the evolving dynamics of energy supply and demand.

The deal was done at $6 a barrel discount to September ICE Brent on delivered basis. Some sources said that Reliance secured the deal at a $6 per barrel discount to the prevailing market price of Brent crude oil futures contracts. RIL stands to benefit from cost savings on their purchase of Canadian crude oil, potentially enhancing their profit margins in the refining process.

AWB, or “Albian Heavy Synthetic Blend,” is a type of heavy crude oil produced in Alberta, Canada, primarily by Canadian Natural Resources (CNR) and MEG Energy. It presents both challenges and opportunities for the oil industry due to its unique characteristics and market demand.

The statement by sources indicates that several Chinese firms, including Sinochem, Unipec (the trading arm of Sinopec, Asia’s largest refiner), and PetroChina, have purchased multiple cargoes of AWB (Albian Heavy Synthetic Blend) and Cold Lake crude from a pipeline. It also reflects China’s strategic efforts to diversify its sources of crude oil supply to meet its growing energy demands.