Reliance forecasts healthy oil demand on the back of steady economic growth

Reliance said trade flows are likely to improve with easing out of supply chain disruptions.

Oil demand is expected to remain healthy on the back of a steady economic growth, Reliance Industries Limited projected in its annual report for FY23.

Fresh supply from upcoming refining capacities in the Middle East, China and Africa is likely to keep the market in balance, the company said. “Oil price and product cracks to remain firm as global trade realigns in the aftermath of the Russia-Ukraine conflict. Relaxation in Chinese Zero Covid policy is expected to boost China demand,” it said.

Reliance said in the annual report that trade flows are likely to improve with easing out of supply chain disruptions.

“Polymer domestic demand is expected to be strong, driven mainly by growth in e-commerce, packaging, durables, auto and infrastructure segments. Strong demand is likely to continue for Pipe sectors backed by infrastructure projects,” the company said.

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In a post-results media call on July 21, Reliance had said that voluntary oil production cut by the Organisation of Petroleum Exporting Countries and its allies, or OPEC+, might keep the crude oil prices elevated and impact demand.

V Srikanth, Chief Finance Officer at RIL, said that going ahead, high inflation, subdued global demand, and increased supply from China might affect the company’s downstream exports to the US and Europe.

"Overall, from a risk factor point of view, voluntary oil production cuts by OPEC+ countries may keep the crude prices elevated and impact demand. Other factors to impact demand could be higher inflation, higher supply from China, etc. These might impact our exports to the US and Europe," he said in the media call.

The current refining capacity of Reliance stands at 1.4 MMBPD (million metric barrels per day).

"Our O2C business is transforming. From switch to renewable sources of energy and newer energy technologies to promoting the concept of circular economy especially for our petrochemical products, sustainable business techniques are rapidly gaining momentum," said Chairman Mukesh Ambani in the annual report.

In the annual report, the company said that natural gas is expected to play a key role as a transition fuel and share of gas in energy mix is expected to increase from 6 percent to 15 percent by CY2030.

The company said its producing deep-water fields are expected to yield nearly 30 percent of India’s domestic production.

Output from Reliance’s MJ field began in the first quarter of FY2023-24. The KG D6 gas will account for approximately 30 percent of India’s domestic gas production at its peak capacity of 30 MMSCMD and will cater to key sectors like CGD, power, fertiliser, refiners, steel, glass, and ceramics.

Reliance Industries, the country's largest entity in terms of market capitalisation, will hold its 46th annual general meeting (AGM) virtually on August 28, as per a regulatory filing made by the company on August 4.

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