Venezuelan Crude Could Add ₹12,600 Crore to Reliance Industries’ EBITDA

Reliance Industries (RIL) could increase its annual oil-to-chemicals (O2C) earnings before interest, taxes, depreciation and amortisation (EBITDA) by ₹8,400 crore–₹12,600 crore if discounted Venezuelan crude helps improve its blended gross refining margin (GRM) by $2–$3 per barrel, according to YES Securities. The brokerage’s estimate is based on Reliance’s refining scale, Jamnagar’s ability to process heavy crude and the potential restoration of a feedstock-cost advantage as Venezuelan oil supplies return.

The estimate is a scenario, not an earnings increase already recorded by the company. The benefit depends on whether Reliance can maintain authorised access to Venezuelan barrels, secure them at attractive delivered prices and run its complex refinery efficiently. The opportunity is also influenced by the changing economics of Russian crude, freight costs, global fuel demand and the discounts available on competing grades.

Key takeaways

• Potential EBITDA uplift: YES Securities estimates an annualised O2C EBITDA increase of ₹8,400 crore–₹12,600 crore if blended GRM improves by $2–$3 per barrel.
• Margin sensitivity: The brokerage estimates that every $1-per-barrel improvement in blended GRM could add around ₹4,200 crore to annualised EBITDA.
• Jamnagar advantage: Reliance’s refinery can process difficult heavy, high-sulphur crude grades and convert more of their residual material into higher-value products.
• Venezuelan supply recovery: Indian imports of Venezuelan crude are expected to rise sharply in October 2026, with scheduled deliveries estimated at about 465,000 barrels per day by Kpler, according to Business Standard.
• Regulatory condition: Reliance’s purchases remain subject to applicable US licensing conditions and the continuity of permitted trade.
• Not guaranteed: Crude discounts, freight, refinery utilisation, product prices and operating costs will determine how much of the potential margin benefit reaches earnings.
• Brokerage view: YES Securities retained a buy rating and a ₹1,660 target price in its analysis; this is the brokerage’s assessment, not a guaranteed share-price outcome.

Why Venezuelan Crude Matters to Reliance Industries

Reliance’s Jamnagar refinery complex in Gujarat is designed to process a broad range of crude oils, including heavy and sour grades that can be difficult for less complex refineries to handle economically. Venezuelan crude, particularly Merey-16, has historically been important because it can trade at a discount to lighter benchmark grades while fitting Jamnagar’s processing capabilities.

Crude oil is not a uniform commodity. Different grades vary in density, sulphur content, acidity and metal concentration. These properties influence the equipment required to process the oil, the amount of higher-value products a refinery can produce and the costs involved in treating the feedstock.

Heavy crude generally needs more intensive processing than lighter crude. It may require additional conversion and treatment to produce transport fuels and other refined products that meet market specifications. A refinery without the necessary equipment may have limited ability to process such feedstock or may produce a less attractive product mix.

Jamnagar’s configuration gives Reliance flexibility to process these challenging grades. The complex includes delayed coking units, hydrocracking capacity and a petroleum-coke gasification system. Together, these facilities help convert heavier refinery streams into more useful products and support the integrated operation of the refinery.

The commercial advantage therefore comes from two related factors: the price paid for the crude and the ability to process it efficiently. Buying a discounted barrel is valuable only if the refinery can turn it into products worth more than the total cost of acquiring and processing it.

What Is Merey-16 and Why Is It Usually Discounted?

Merey-16 is a Venezuelan heavy crude grade associated with the country’s Orinoco oil region. Its low API gravity indicates that it is relatively dense, while its sulphur and other impurities create additional processing requirements.

Crude oil prices vary by grade because refiners consider both the purchase price and the value of the products they expect to make from it. A heavier grade may sell at a discount to Brent, the international benchmark, because it requires more processing and may yield a different mix of products.

For a refinery equipped to handle such oil, the discount can create an opportunity. If the plant can process the crude efficiently and recover valuable products, the lower feedstock cost can improve its economics compared with buying a more expensive grade.

YES Securities’ analysis attributes part of Reliance’s historical advantage to the discount on Venezuelan heavy crude. The brokerage estimates that this feedstock benefit previously contributed around $1.30 per barrel. It estimates a further $1.30-per-barrel benefit from Jamnagar’s configuration and ability to limit the production of lower-value residual fuel oil.

Those figures are brokerage estimates, not independently audited measures of the benefit from every Venezuelan cargo. Actual economics vary with the delivered price, crude quality, refinery yields, product prices and operating conditions.

How Jamnagar’s Refinery Technology Creates an Advantage

Reliance’s potential benefit is not simply a result of buying cheaper oil. Jamnagar’s processing capabilities are central to the argument that the company could earn more from Venezuelan crude than a less complex refinery.

Delayed coking converts heavy residual oil

Heavy crude can leave substantial quantities of residual material after the initial stages of refining. Delayed coking breaks down these heavy streams into lighter products and petroleum coke, helping reduce the volume of low-value residual oil.

That capability can improve the value recovered from difficult feedstock. The economics depend on the quality of the incoming crude, the output mix, energy consumption and market prices for the resulting products.

Hydrocracking produces higher-value fuels

Hydrocracking uses hydrogen, pressure and catalysts to convert heavier hydrocarbon streams into lighter products. In a complex refinery, it can help produce transport fuels and other products that command higher values than untreated heavy fractions.

The ability to combine heavy-crude processing with hydrocracking gives Jamnagar flexibility when the relative prices of crude grades and refined products change.

Gasification supports integrated operations

Reliance’s petroleum-coke gasification complex can convert petroleum coke into synthesis gas, or syngas. This can support hydrogen production and plant utilities, reducing dependence on certain externally purchased fuels or feedstocks.

YES Securities argues that the combination of discounted crude, conversion equipment, gasification and integrated logistics can create a structural cost advantage when the right feedstock is available.

The word “when” matters. The refinery’s technology does not guarantee superior margins in every market. If Venezuelan crude becomes expensive relative to alternatives, or if product prices weaken, the advantage can narrow even when the refinery operates as designed.

How the ₹12,600 Crore EBITDA Estimate Is Calculated

YES Securities estimates that every $1-per-barrel improvement in Reliance’s blended gross refining margin could generate approximately ₹4,200 crore in annualised EBITDA. Applying that sensitivity to a $2–$3-per-barrel improvement produces the potential earnings range highlighted in the report.

Assumed improvement in blended GRM	Estimated annualised EBITDA uplift
$1 per barrel	₹4,200 crore
$2 per barrel	₹8,400 crore
$3 per barrel	₹12,600 crore

Source: YES Securities estimates reported by The Economic Times and Business Today. These are scenario calculations, not reported incremental earnings.

The calculation is based on Reliance’s annual crude throughput of approximately 70 million tonnes, as cited by the brokerage. The relationship between a per-barrel margin improvement and annual EBITDA depends on throughput, utilisation, the product mix and the conversion of refining-margin changes into operating earnings.

Gross refining margin represents the difference between the value of a refinery’s output and the cost of the crude and related feedstock used to produce it, subject to the specific calculation method. It is a key measure of refining economics, but it is not identical to net profit or free cash flow.

EBITDA is also not the same as net profit. It is measured before interest, taxes, depreciation and amortisation. Even if O2C EBITDA rises, the effect on net profit and cash generation will depend on other expenses, capital spending, working capital, financing costs and tax.

The ₹12,600 crore figure should therefore be read as the high end of a modelled annualised opportunity under favourable assumptions. It does not mean Reliance has already earned that amount, nor that the entire sum would necessarily flow to shareholders.

Venezuelan Oil Imports Are Returning to India

Venezuelan crude supplies to India have recovered after falling sharply during periods of US sanctions and restrictions on oil trade. In an October 7 report, Business Standard, citing Kpler estimates, said Indian deliveries were expected to more than double to about 465,000 barrels per day in October 2026 from approximately 196,000 barrels per day in September.

The forecast was conditional on scheduled cargoes arriving on time. It should not be treated as a final count of barrels delivered during the month.

Reliance has historically been a major buyer of Venezuelan crude because its Jamnagar complex can process the heavy grades. According to YES Securities, the company previously handled roughly 300,000–400,000 barrels per day of Venezuelan Merey-16 before volumes fell to negligible levels between 2021 and 2023 following sanctions.

Supply channels began reopening in 2024 and 2025 through temporary or individual authorisations, and Reliance secured a US general licence to import Venezuelan crude directly in February 2026, according to reporting by The Economic Times.

Reuters reported in July 2026 that Reliance had resumed direct purchases from Venezuela’s state oil company, PDVSA, alongside cargoes sourced through trading firms. That matters because direct purchases can change how the company secures volumes, although the price and terms of individual cargoes remain central to their economics.

The return of supply provides an opportunity to restore some of Reliance’s historical feedstock flexibility. It does not establish that the same volume will be available continuously or that every cargo will be delivered at a sufficiently large discount.

Why the Discount Matters More Than the Headline Crude Price

A crude grade can look attractive at the point of sale but become less competitive after transportation and other costs are included. The relevant comparison for a refinery is the delivered cost of a barrel, adjusted for quality and the products it can produce.

That distinction became clear in August 2026, when Business Standard reported that the delivered cost of Venezuelan Merey had risen to around $95 per barrel as freight costs increased and discounts narrowed following the West Asia conflict. The report said imports had averaged around 262,000 barrels per day during April–July.

Those conditions illustrate why the Venezuelan opportunity is not permanent by default. A disruption to shipping routes, higher insurance costs or a change in the discount offered by suppliers can alter the relative economics of competing grades.

The price of Russian Urals is another important variable. YES Securities argues that narrowing discounts on Russian crude make Venezuelan heavy crude more attractive again for Reliance. If Russian oil becomes more expensive relative to Venezuelan alternatives, Jamnagar could benefit from switching more of its crude slate toward the latter, provided the necessary supplies and authorisations remain available.

But if Venezuelan discounts narrow or freight increases, the advantage could weaken. The brokerage’s earnings sensitivity assumes an improvement in blended GRM; the actual improvement will depend on the relative economics of the whole crude slate rather than the price of a single grade alone.

Can Reliance Restore Its Refining Margin Premium?

YES Securities estimates that Reliance could rebuild a sustainable gross refining margin premium of around $3 per barrel over domestic public-sector refiners. The brokerage says the company’s historical premium was supported by discounted Venezuelan crude, Jamnagar’s complexity and integrated logistics.

Its analysis cites a period when Reliance’s margin premium over the average of Indian PSU refiners ranged from about $3.08 per barrel in FY18 to as much as $7.10 per barrel in FY15. The advantage subsequently narrowed amid changes in crude availability, the spread of discounted Russian oil and other market conditions.

A return to a $3-per-barrel premium would not necessarily recreate the strongest historical years. It would, however, represent an improvement if Reliance can maintain that advantage over time.

The comparison needs to be treated carefully. Different refiners have different configurations, product mixes, operating costs, locations and access to crude. Reported GRM figures may also differ in the way they are calculated or presented. A margin premium is therefore a useful comparative indicator, not proof that one company will outperform in every quarter.

The brokerage’s argument is that Reliance’s physical infrastructure gives it options that some competitors lack. The extent of the advantage will still depend on market conditions and execution.

What Investors Should Watch in Reliance Industries

The potential EBITDA increase is relevant to investors because refining is a significant part of Reliance’s integrated energy business. But the company’s overall performance also depends on its retail, digital services, telecom and other businesses.

Investors tracking the Venezuelan crude opportunity should focus on several indicators:

• Crude sourcing: Whether Reliance continues to receive authorised Venezuelan cargoes and maintains access to suitable grades.
• Delivered discounts: The difference between Venezuelan crude costs and comparable alternatives after freight and other charges.
• Refinery utilisation: Whether Jamnagar operates at high utilisation and makes full use of its heavy-crude conversion equipment.
• Blended GRM: Whether reported refining margins improve over multiple periods rather than in one short-lived market window.
• O2C EBITDA: Whether any improvement in refining economics translates into higher operating earnings.
• Regulatory conditions: Whether US licences and other applicable permissions remain in place and permit the intended transactions.
• Working capital and cash flow: Whether higher earnings translate into cash after inventory, operating costs and capital expenditure.

YES Securities retained a buy rating on Reliance and set a target price of ₹1,660 in its analysis. That target reflects the brokerage’s assumptions and valuation method. It is not a guarantee of future returns, and investors should assess the assumptions alongside other research and their own risk tolerance.

The Bigger Picture

The Venezuelan crude opportunity shows how a refinery’s physical design can become a source of competitive advantage when global oil trade changes. Reliance’s Jamnagar complex can process heavy grades that require more sophisticated equipment, potentially allowing the company to benefit when those barrels trade at attractive discounts. Access to the right feedstock can improve margins, but the advantage depends on the delivered price and the value of the products produced.

The ₹8,400 crore–₹12,600 crore estimate highlights the sensitivity of a large refinery to relatively small changes in per-barrel margins. Yet the calculation remains a modelled annualised opportunity, not a forecast that can be accepted without conditions. Regulatory permissions, crude discounts, freight, product prices and utilisation will determine how much of the potential benefit becomes actual operating earnings.

Looking Ahead

The next indicators will be the volume of Venezuelan crude reaching Reliance, the discounts available relative to Russian and other heavy grades, and the direction of Jamnagar’s reported refining margins. October import estimates provide a signal of recovering flows, but scheduled deliveries and one month’s volumes do not establish a long-term supply guarantee. The company’s disclosures and future market data should help show whether the feedstock advantage is becoming durable.

For investors, the central test is whether a better crude mix can produce sustained improvement in O2C EBITDA and cash flow. A $2–$3-per-barrel margin improvement would be significant under YES Securities’ model, but the outcome depends on market conditions and refinery execution. Until the improvement appears in reported results, the ₹12,600 crore figure should remain a potential upside scenario rather than earnings already secured.