New Delhi, Oct. 30 -- US Secretary of State Marco Rubio met External Affairs Minister S. Jaishankar in Mumbai, instead of India's capital, New Delhi, on October 20 to discuss trade, energy, defence and emerging technologies. He then visited Reliance Industries' Jamnagar complex, where discussions with Mukesh and Anant Ambani reportedly covered global energy markets, new energy, data centres and commercial opportunities. Rubio landed in India's financial capital days after President Donald Trump waived potential sanctions on the world's top buyers of Russian oil, a list that includes India. Rubio's itinerary sparked a political storm after the US ambassador to India said Washington expected Jaishankar to travel to meet Rubio, prompting opposition leaders to accuse the government of allowing India's top diplomat to be "summoned" on home soil.
Rubio's visit to Jamnagar was primarily to encourage Reliance Industries to refine more Venezuelan crude at its local refineries and potentially begin producing oil in the South American country, he told reporters in Mumbai. Reliance's two massive refineries at the Jamnagar complex, with a combined capacity of about 1.4 million barrels per day of crude oil, are able to process the ultra-heavy crudes coming out of Venezuela. Following the Trump administration's capture of former Venezuelan leader Nicolas Maduro in January, China, a close ally of the Maduro government, stopped purchasing Venezuelan crude. Since then, Reliance has emerged as a significant importer of the nation's crude.
Rubio's visit shows how closely diplomacy and corporate interests can intersect. In his meeting with Jaishankar, Rubio predictably pressed India to increase its energy purchases from the US. The next day, during his meeting with Ambani, he reportedly urged Reliance to set up refining facilities in Venezuela to service the US market. It may be recalled that on August 30, the US struck a deal with Venezuela to control more than 65 billion barrels of its proven oil reserves. The US President wrote that the agreement would more than double American oil reserves and "substantially lower Gas Prices for all Americans". It is reported that the agreement document reveals carefully constructed terms that favour US interests at every turn and cement the power of a small group of people handpicked by the Trump administration to govern and profit from the deal. The role of the Venezuelan government and the potential benefits to its people are largely absent from the text.
However, treating heavy, sour grades like Venezuela's flagship Merey 16 allows complex refiners to capture a structural margin premium over simpler peers. Market analysts estimate that maximising Venezuelan crude intake can add $2 to $3 per barrel to Reliance's blended gross refining margin, which can translate into an additional Rs.8,400 crore to Rs.12,600 crore ($1 billion to $1.5 billion) in annual downstream operating profit.
Energy experts observe that the stakes of the proposed refining deal are as much American as Indian. With a processing capacity of 1.4 million barrels per day, Jamnagar is a major diesel exporter to the United States, Europe, Africa, Asia and Australia, and US diesel prices are under pressure ahead of the midterm elections. Any significant disruption to its operations or crude sourcing could have implications for diesel availability, regional product balances and refining margins. Washington's immediate interests appear increasingly aligned with maintaining energy flows, expanding bilateral trade and ensuring market stability rather than forcing a rapid reduction in Russian crude purchases.
Although India imports around 90 per cent of its crude oil requirement, it has become one of the world's largest exporters of refined petroleum products by using its large and sophisticated refineries to process imported crude for both the domestic market and international buyers. India's petroleum product exports could increase by around 25 per cent in FY26 from the FY25 level of $44.4 billion. At present, the actual annual production of petroleum products is around 300 million metric tonnes (MMTPA) against domestic consumption of approximately 239 MMTPA. The surplus 61 MMTPA is exported. Reliance Industries accounts for nearly 70 per cent of the country's refined fuel exports. With the export of additional fuel by refining added Venezuelan crude, Reliance Industries' share in petroleum exports will rise further.
Environmental activists consider oil refineries a deadly industry. One study reported 188 chemicals, of various levels of toxicity, emitted from California refineries at different times. Toxic pollutants are emitted from equipment and storage leaks, accidental releases and refining processes.
While the Venezuelan crude oil deal between the US administration and Reliance Industries is a win-win situation for these two stakeholders, no one has flagged the deadly environmental impact on the ecosystem. India ranked 176th out of 177 countries in the latest Environmental Performance Index (EPI) 2026, developed by the Yale Center for Environmental Law & Policy in collaboration with the Center for International Earth Science Information Network, Columbia University. While estimating increased refining margins for Reliance, analysts failed to recognise the environmental cost of processing such toxic products. India has become a dumping ground for the carbon-intensive and highly polluting refining industry.
Views expressed are personal. The writer is a professor of Business Administration
Published by HT Digital Content Services with permission from Millennium Post.