In its latest annual report, Reliance Industries Ltd (RIL) has highlighted the growing risks from geopolitical tensions and tariff uncertainties, which could impact trade flows and the demand-supply balance in its crucial oil-to-chemicals (O2C) segment.
“Geopolitical and tariff-related uncertainties may weigh on the O2C segment,” the company said, underlining concerns over volatile crude prices and shifting global trade dynamics.
These developments, RIL notes, are being shaped by evolving sanctions, changing tariff regimes, and production decisions by OPEC and non-OPEC nations.
Oil Demand Expected to Stay Strong Despite EV Growth
Despite the challenges, Reliance remains optimistic about global oil demand.
The company expects consumption to rise due to a combination of strong economic growth, China’s stimulus efforts, and the possibility of easing geopolitical tensions.
“Oil demand is likely to maintain growth despite the rising adoption of electric vehicles (EVs),” the report stated.
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Refinery Outlook: Margins May Tighten, But Closures Offer Upside
In its 2025 oil outlook, RIL pointed out that the ramp-up of new global refineries could lead to weaker product cracks. However, potential refinery closures could offset this pressure, offering upside for refining margins.
“Fuel demand in India is expected to remain healthy,” said RIL, supported by rising economic activity.
Downstream Chemical Demand to Outpace GDP Growth
Reliance is also bullish on downstream chemical demand, particularly within India.
Driven by sectors such as infrastructure, packaging, automobiles, and agriculture, the company expects chemical product demand to grow faster than GDP.
“Demand for downstream chemical products is expected to grow ahead of the GDP growth rate,” RIL added.
Strong Liquidity and Financial Strategy Amid Market Volatility
RIL reiterated that it has a robust liquidity management framework in place to tackle volatile market conditions.
The company said it uses a diverse funding strategy, ensuring access to funds while minimizing risks.
“Surplus funds were deployed in stable yield instruments, insulated from market shocks,” the report highlighted.
RIL also mentioned the success of its multi-currency, multi-instrument financing strategy, which helped maintain an optimal capital structure at competitive costs. These funds were primarily used for green capex and refinancing debt maturities.
Green Goals: Net Carbon Zero Target and Battery Gigafactory
Even as the O2C business navigates global uncertainty, RIL remains firmly focused on its green energy transition.
The company is making strong progress towards its net carbon zero target by 2035 and has begun setting up a 30 GWh modular battery gigafactory.
This facility will support production of battery cells, packs, containerised battery energy storage systems (BESS), and include backward integration into battery materials, furthering RIL’s push into the clean energy space.
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