The brokerage noted that while Urals crude trades at a discount of $4–7 a barrel to Brent, higher logistics and insurance costs trim the effective benefit to around $1 a barrel for Reliance’s refining throughput. “The benefit of Russian crude, a key investor query, is limited,” Jefferies said in a note dated September 4. Instead, stronger refining margins are driving growth for the company. RIL’s O2C earnings for the first half of FY26 are tracking 15% higher year-on-year, well-above Jefferies’ full year growth target of 8%. This, the brokerage added, is being largely driven by strength in auto fuels.
Further, European diesel spreads are firm on lower imports after the EU announced a ban on refined product imports made from Russian crude starting January 21, 2026. Gasoline margins are strong, with US gasoline inventories at a 5-year average. The report further stated, “Reliance has the flexibility to produce diesel from Middle East crude for export to the EU.
Other structural factors are also supportive. Jefferies highlighted that refinery closures totalling 1.1 million barrels per day are confirmed in 2025—more than the combined closures over 2023 and 2024—while new additions of 0.5 million barrels per day (MBPD) are expected to lag demand growth of 0.7 mbpd.
On petrochemicals, Jefferies said margins remain near multi-year lows but could recover as capacity closures in Asia and China’s “anti-involution” measures help stabilize spreads over the medium term.
Jefferies also emphasised that Reliance has remained compliant with western sanctions on Iranian and Venezuelan crude and is likely to follow suit if sanctions extend to Russian crude—an outcome that would be inflationary for global prices.As for valuations, the report stated that the stock trades at a discount to long-term valuation multiples, with the market assigning “zero value” to new energy and data centre ventures. Jefferies has maintained its ‘Buy’ call on the stock and assigned a price target of Rs 1,670. This implies an upside potential of 23% from the last closing price of Rs 1,359 on the NSE.At about 11:40 am, shares of the company were trading at Rs 1,368, higher by 0.61%. Reliance Industries’ stock price has risen over 16% in the last six months.
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