India is a “refining superpower” says Rubio, as world faces a potential energy crisis

NEW DELHI – When United States’ Secretary of State Marco Rubio visited India this week, he skipped the country’s capital New Delhi but visited Jamnagar, a small city in the western Indian state of Gujarat.The visit may seem odd to the uninitiated but it was strategic as Jamnagar is home to the largest and most complex single-site petroleum refinery in the world owned by Reliance Industries Ltd.This gives it an important place in US geoeconomic calculations that seek to calm global oil prices as well as deepen energy trade with India, including by ramping up imports of US and Venezuelan crude.The visit, which was more commercial in nature and included a stop in India’s financial capital Mumbai, comes at a time when the country’s global role as a petroleum refiner has assumed greater importance. Refineries and energy infrastructure have been repeatedly attacked in ongoing conflicts in both Russia and West Asia, crunching the global supply of refined petroleum products.India is already the world’s fourth largest crude refiner - after China, the US and Russia - with an installed capacity of around 267 million tonnes per annum (MMTPA), something the government aspires to expand to 309.5 MMTPA by 2030.This growing capability is set to become more critical in the long run with little new refining capacity expected in the immediate future in the US, ongoing attacks on Russian refineries and China placing a refining cap to meet its emission reduction targets.“With further capacity additions planned, India is increasingly positioned as a key supplier of refined products to global markets,” said Sumit Ritolia, Lead Analyst for Refining Supply and Modelling at Kpler, a commodities data and analytics firm.He told The Straits Times that India’s downstream refining sector has remained relatively resilient amid ongoing challenges, supported by diversified crude sourcing, continued access to discounted Russian crude and refinery utilisation that has frequently exceeded its full-load production capacity.“This has allowed Indian refiners to capitalise on stronger diesel margins and maintain robust product exports to Asia, Africa, Europe and even the US,” added Ritolia.Global petroleum product exports from India were up by around 37 per cent year on year for the period between April-September, touching over US$41.18 billion (S$52.65 billion), according to government data.Among the destinations where such exports have surged are Singapore and the wider Asean region. India’s merchandise exports to the city-state increased by around 103% year on year for the same period to US$11.07 billion, with petroleum exports to Singapore accounting for over US$4.51 billion in the period from April-August 2026.“The lack of Middle East product supply, lower than expected refinery runs by Asean countries and crude supply issues reduced the domestic product supply, leading to increased product imports (in Singapore),” said Pankaj Srivastava, Senior Vice President for Commodity Market - Oil at Rystad Energy, an independent research and energy intelligence company.Singapore’s position as a major trading, storage and redistribution hub has also prompted higher imports from India, with products subsequently re-exported to other Asian markets.Ahead of his trip, Rubio had referred to India as a “refining superpower”, acknowledging the country’s growing heft in the global petroleum product supply chain amid ongoing crude sourcing and refining difficulties as well as rising energy prices in the US ahead of midterm congressional elections in November.“The whole world is interested in diversifying how we get energy… I think this is a company (Reliance) and this is a country (India) that has refining capacity,” he told The Indian Express newspaper, noting India as one of the few places that can refine Venezuelan heavy crude.A key item on Rubio’s agenda for this visit, therefore, was to get India’s Reliance Industries and others in the country to refine more Venezuelan crude as Washington aims to bring additional fuel supplies to the global market spooked by its conflict with Iran. Reliance’s Jamnagar refinery alone has the capacity to process 1.4 million barrels of crude per day.According to a Bloomberg report, India’s imports of Venezuelan oil have already surged to the highest in almost seven years in October, as steep discounts lure Indian refiners while Russian supplies become costlier.Trump has also eased US sanctions on Russian diesel exports, including to the US, in a bid to control rising oil prices in the global market as well as American gas stations. On Oct 16, he also waived key Russia-related US sanctions and tariffs - including duties on a country’s goods and penalties for buying Russian oil and gas - that would have impacted big buyers of Russian oil, including India.Moreover, Reliance Industries, owned by one of Asia’s richest industrialists Mukesh Ambani, has also pledged to start a refinery in Brownsville in Texas, with US President Donald Trump claiming the firm’s investment in the project - reported at US$300 billion - as one of the biggest in US history.Indian refining strength comes from its capability to process a diverse crude slate, ranging from lighter US barrels to heavier and more challenging Russian and Venezuelan crude, besides its ability to source crude from diverse suppliers and export refined products competitively across global markets.This combined asset is being further reinforced with greater capacity addition in India, including those backed by government investment. This includes the launch of a public sector refinery in Pachpadra in Rajasthan in July 2026, with a capacity to process 180,000 barrels of crude per day.According to an Oct 15 blog post by RBN Energy, a Houston-based analytics firm, India’s rapidly rising fuel demand is driving a new wave of refinery investment. “About 900 Mb/d of capacity (or 900,000 barrels per day) is slated to come online through 2030, including expansions and grass-roots projects,” it added. More than 70% of this capacity is expected to start up before the end of 2027.Srivastava noted that “capacity growth is not in question” with strong government backing and diverse crude sourcing strategies, among other supporting factors. “Moreover, with China capping their refining capacity… and diversifying to petrochemicals, India is in a sweet spot to capture the fuel market by expanding its refining capacity,” he added.China, the world’s largest oil refiner, has placed a refining cap of 20 million barrels per day, a move in keeping with its goal to trim its CO2 emissions while also maintaining efficiency of its refining sector by decommissioning ageing infrastructure.But India also faces numerous challenges, as it builds up its refining profile, not least securing reliable and competitively priced crude supplies, managing geopolitical disruptions and sanctions-related risks, besides ensuring timely completion of new refineries.“India remains heavily dependent on imported crude, making freight costs, supply-chain security and crude sourcing flexibility particularly important,” said Ritolia. “Additionally, maintaining competitive refining margins while meeting increasingly stringent fuel specifications and environmental requirements will be critical.”While experts expect India’s focus on increasing the use of biofuels as well as renewable energy, along with growing electric mobility, to leave scope to grow global petroleum product exports, the country’s demand for petroleum products is also growing strongly, which is expected to absorb part of the incremental refining capacity.India is positioned as the largest global source of oil demand growth through 2030 and continuing toward 2050, driven by rapid urbanisation, transportation, and industrial expansion.“Ultimately, India’s ability to expand exports will depend not just on adding refining capacity,” added Ritolia, “but also on how quickly domestic demand grows relative to incremental refinery output.”