Reliance warns of a volatile oil market in FY27, bets on gas and green chemicals for growth

Reliance Industries Limited, in its annual report for FY26, warned that global oil demand growth is likely to remain weak in FY 2026-27 due to elevated crude prices, economic slowdown, and continuing geopolitical tensions in the Middle East.

Reliance said the outlook for FY27 remains “extremely vulnerable” to geopolitical, macroeconomic, and policy risks.

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“Refinery and oil infrastructure damages, which caused product supply losses, are likely to take a longer period to recover, resulting in continual volatility in the market. The FY 2026-27 outlook remains extremely vulnerable to geopolitical, macroeconomic, and policy risks,” RIL said.

The company added that, in addition to supply disruptions from the Middle East, domestic policy measures — including Government of India directives on Special Additional Excise Duty (SAED), petrochemical feedstock usage, and duty exemptions on key petrochemical products — could pressure domestic demand and refining margins.

However, despite the uncertain environment, RIL said it sees a “multi-decade opportunity” ahead for its energy and materials businesses.

“The focus is now on optimising a fully operational and integrated platform — driving captive value creation, financial self-sufficiency, and expansion in green chemicals,” the company said.

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RIL highlighted the growing importance of natural gas in India’s energy transition strategy.

According to the company, natural gas is expected to increase its share in India’s energy mix from around 6% currently to 15% by 2030 as the country pushes for cleaner fuel adoption.

Reliance said its gas portfolio remains well-positioned to benefit from the structural shift, contributing nearly 30% of India’s domestic gas production.

The company expects continued development of its deepwater and coal bed methane (CBM) assets, supported by existing infrastructure and operational efficiencies, to help augment supplies and meet rising demand for gas in FY27 and beyond.