The Texas Refinery Mystery

Deal Or No Deal? Trump’s Reliance Refinery Claim Keeps Industry Guessing 

By Amritha Pillay

What?

Did US President Donald Trump rush into announcing a yet-to-be-signed deal with Reliance Industries Limited (RIL)? Delivered in typical Trumpian style on the social media platform Truth Social, the US president said that Reliance Industries planned to build a refinery in Texas under a ‘$300 million deal’.

“Thank you to our partners in India, and their largest privately held Energy Company, Reliance, for this tremendous Investment. It is because of our America First Agenda, streamlining Permits, and lowering Taxes, that have attracted Billions of Dollars in Deals coming back to our Nation,” the American president said in a post early Wednesday morning, India time. 

Indian stakeholders woke up to this news while there was complete silence from RIL.  

For the record, Mukesh Ambani-promoted RIL has so far neither confirmed nor denied this, and hasn’t put out an official statement. 

If and when this happens, it would, in a way, expand RIL’s existing exposure to foreign markets, where the cost, feedstock sourcing and execution of a refinery in a foreign land (a maiden attempt for RIL) would be key to watch out for.

What We Know 

Trump announced that this refinery, the first in 50 years, would be located in Brownsville, Texas. 

The post, without much context or details about the deal, has raised more questions than provided answers. 

“Is it an idea or the actual news?” asked a senior executive, an old hand of the Indian oil and gas industry, told The Core. This question perhaps reflected the confusion in the minds of all industry watchers. 

In a separate press statement, America First Refining said it has received a 9-figure investment (which translates to more than $100 million but less than $ 1billion) from a ‘global supermajor’ and also signed a 20-year offtake term sheet with the same company. 

Not much is known of the entity named America First Refining. The company's website news section also hosts media coverage clips for another entity named Element Fuel Holdings LLC, which, according to older news reports, was planning the said Texas refinery. Both Element Fuel and America First Refining have the same founder named John V Calce. Element Fuel's web address now redirects to that of America First Refining.

RIL has so far not made any recent disclosure of any major investment in a US company. People in the know in India said there have been talks, but no final agreement has been signed.

Industry sources highlighted that Trump’s latest social media post sits well with recent developments. For instance, Mukesh Ambani, Asia’s richest man, along with his wife Nita, attended a private reception for the President in Washington DC, shortly after Trump began his second tenure as the US president last year. 

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How A Major Dollar Rise In Crude Oil Travels Through India’s Energy Chain

By Dev Chandrasekhar

What?

On March 9, Brent crude jumped above $110 per barrel for the first time in more than three years. The trigger was the Iran conflict drawing in Hormuz transit routes, cutting off a chokepoint that carries roughly a fifth of the world’s seaborne oil. For most large oil-consuming economies, a price spike of this kind is an inconvenience. 

For India, which sources over 88% of its crude through imports and produces very little domestically, it is a direct cost hit. Every additional dollar per barrel increases the trade deficit by roughly $243 million a year. There is no natural hedge.

The shock does not fall evenly across India’s oil industry. It hits upstream producers, midstream pipelines, downstream refiners, and the government budget in different ways and different directions. 

Why?

India produces only about 28.6 million metric tonnes of crude domestically each year, less than 12% of what it consumes. When prices rise, the import bill rises almost in full. Some companies gain. Most lose. The arithmetic is most unkind to refiners.

The currency makes it worse. The rupee was at nearly Rs 92 to the dollar on 8 March 2026, against Rs 83 in April 2024. High oil prices pull dollars out of India; safe-haven flows pull them further. 

The Reserve Bank of India, India’s central bank, intervened in spot and forward markets, but the direction of travel was set. When crude and the dollar both move against India at the same time, the import bill worsens in both currencies simultaneously. 

For Indian Oil Corporation Limited (IOCL) alone, a 5% rupee fall hits standalone profit before tax by Rs 5,725 crore.

The government has a tool for controlling the upstream windfall. When prices spike, it levies the Special Additional Excise Duty (SAED) — a windfall tax on domestic crude production first applied in 2022. 

For Oil India, SAED rose from $2.59 per barrel in Q1 FY 2023-24 to $10.27 per barrel in Q1 FY 2024-25 as prices climbed. Oil and Natural Gas Corporation (ONGC) reported a Rs 1,350 crore decrease in statutory levies in Q2 FY 2025-26 after SAED was abolished in December 2024. The mechanism smooths government revenues while introducing earnings volatility for upstream producers.

Why It Matters 

On the subsidy side, the picture is messier. The prices of liquefied petroleum gas (LPG), largely used for cooking in India, are controlled. When crude rises, IOCL, Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) sell LPG below cost and wait for the government to cover the gap. 

The Union Cabinet approved Rs 30,000 crore in August 2025 to cover LPG losses; this followed a prior Rs 22,000 crore subsidy against a Rs 28,000 crore negative buffer. IOCL’s management has noted that the lack of timely reimbursement has suppressed the market capitalisation of all three OMCs.

March 2026 has three features that were not all present at once in prior episodes: the price shock is coming from a military conflict with no visible resolution timeline; the rupee enters this cycle at a structurally weaker level than in previous ones; and the LPG subsidy buffer has just been refilled, meaning the government is already spending on that line before prices have been fully absorbed.

30 million

That’s how many barrels of oil Indian refiners have bought from Russia since they got the go-ahead from the US last week, according to sources Bloomberg spoke to.

Pivot: For the past several months, India has been reducing its reliance on Russian oil and sourcing more from Saudi Arabia and Iraq. But that plan collapsed as the conflict in West Asia disrupted shipments and effectively shut the Strait of Hormuz, a key artery for global energy flows.

That’s because India’s purchases of Russian oil, which it increased significantly in the past few years, drew the wrath of US President Donald Trump, who accused India of financing Russia’s war.

By the Numbers: Buying peaked at more than 2 million barrels a day in mid 2024, but dropped to an average of 1.06 million barrels a day in February, according to data intelligence firm Kpler.

Now, however, the calculus has changed again.

Impact: After the US attacked Iran and Tehran retaliated by effectively closing the Strait of Hormuz, oil prices surged, and supply tightened. To prevent a deeper global supply shock, Washington issued a temporary 30-day waiver allowing India to purchase Russian crude that had already been loaded onto ships and was stranded at sea.

US Ambassador to India Sergio Gor defended the move, writing that “India has been a great partner in maintaining stable oil prices around the world,” adding that the United States recognises India’s continued purchases of Russian oil as part of efforts to stabilise global energy markets.

India’s Gas Crunch

The West Asia conflict continues to ripple across India’s economy. Restaurants, hotels and even chai sellers said they were struggling to secure LPG cylinders, forcing many to cut orders or temporarily halt operations as supply tightens.

What’s Next? Some urea producers in India and Bangladesh have shut plants or moved up maintenance schedules after Qatari supplies of liquefied natural gas (LNG) were disrupted. LNG acts as the primary feedstock for urea production, providing both the energy and hydrogen needed to manufacture the fertiliser.

The Lead: To plug the gap, sources told Reuters that state-run GAIL has bought LNG cargo from Oman through a European trader at a fixed price of $17-$20 per million British thermal units, with delivery expected around mid-March.

Backdrop: The shortages contradict earlier assurances from Finance Minister Nirmala Sitharaman that supplies remain stable, even as S&P Global warns that petrochemical producers are already facing raw material shortages.

DGCA Tightens Foreign Airline Rules

Recent reports suggesting that foreign airlines will now require permission to land in India have created the impression of a new rule. However, the Directorate General of Civil Aviation (DGCA) is only proposing amendments to existing rules governing foreign carriers. The requirement for prior approvals has long been part of the regulatory framework, and the move is aimed at tightening oversight and formalising procedures rather than introducing a new requirement.

Flashpoint: Under the draft amendment, foreign airlines designated under bilateral Air Services Agreements will need to obtain operating authorisation from the DGCA through a more structured approval process before launching scheduled services to India. Airlines will also be required to appoint a local representative in India responsible for regulatory coordination, operational matters and passenger grievances.

Why It Matters: The proposed changes require the submission of detailed documentation, including ownership structure, fleet details, and safety records. Operating authorisation will be valid for up to five years, with the DGCA retaining powers to inspect, seek information, and suspend or revoke permissions for non-compliance.

Maersk Imposes Emergency Surcharge

Global shipping companies are beginning to impose additional surcharges as the conflict in West Asia disrupts fuel supplies and maritime trade routes. Denmark-based shipping major A.P. Moller–Maersk has announced a temporary Emergency Bunker Surcharge (EBS) on new cargo bookings, which will apply globally, including India, from March 25, subject to regulatory approvals.

Highlight: The company said the evolving security situation in the region has affected logistics networks and customer supply chains. Around 20% of global fuel moves through the Strait of Hormuz, and tensions in the area have disrupted fuel availability and exports as several refineries operate at reduced capacity.

What's Next? Maersk has also suspended bookings to several Middle Eastern markets while continuing services from India and other unaffected regions. The surcharge will vary between $100 and $600 per container, depending on cargo type and container size.

Growth Amid Uncertainty

India’s economy will likely grow 7.1% in fiscal 2027, moderating from a revised 7.6% in fiscal 2026, as strong domestic demand helps cushion global volatility, a report by Crisil Intelligence said. The forecast assumes another normal monsoon, steady global growth despite geopolitical tensions, and Brent crude averaging $75-80 per barrel.

The Turning Point: Consumption, public infrastructure spending and a gradual pickup in private investment will continue to power growth, even as global trade frictions and conflicts keep the external environment choppy.

Future: “Domestic demand is expected to stay supportive in fiscal 2027, with fiscal measures lifting disposable incomes and private investment seeing a mild pick up,” said Dharmakirti Joshi, Chief Economist at Crisil. He added that geopolitical flare ups and trade uncertainty could transmit risks through commodity prices, trade and capital flows.

The Markets Crash Further On War Uncertainty

On Episode 820 of The Core Report, financial journalist Govindraj Ethiraj talks to Manas Majumdar, Partner– Oil & Gas Sector Leader at PwC India as well as Ajay Rotti, Founder and CEO at Tax Compaas.

• The markets crash further on war uncertainty and ships under attack in the Strait of Hormuz.

• India is well geared to absorb shocks even as the economy grows

• Crude oil supplies are under control as sourcing steps up, says Government spokesperson.

• Are there silver linings in gas supplies as well?

• What the liberalising of investments from China means at this time.