U.S. Secretary of State Marco Rubio will travel to Jamnagar, India, to visit the world's largest refinery, which is owned by the Reliance Industries group of billionaire Mukesh Ambani. Meanwhile, diesel prices in the United States have soared ahead of the mid-term elections.
The International Energy Agency has warned that limited supply in the diesel market could keep prices high until next year. In order to alleviate rising diesel prices, which affect American truck drivers, farmers, and shipping companies, U.S. President Donald Trump suspended sanctions against Russia earlier this month to allow supplies from Moscow to enter the global market.
Several experts told CNBC that the Trump administration is using this trip to focus on business deals rather than politics, as Americans are still paying attention to the economy before the mid-term elections.
They added that not only is Ambani's flagship company, Reliance Industries, investing in an American refinery, but it is also an important buyer of Venezuelan oil; its strong diesel supply capacity also made Jamnagar a focus during Lulio's visit.
On Tuesday, the U.S. State Department announced that Rubio would travel to Samarkand in Uzbekistan from October 17th to 22nd, and then to Mumbai and Jamnagar in India. The announcement did not mention any stop in New Delhi.
Lupio is visiting India for the second time this year. He will meet with senior Indian officials and business leaders "to promote opportunities for business investment and economic cooperation," according to a statement from the State Department.
US-India relations and Ambani
U.S. Ambassador to India Sergio Gore told Bloomberg that Rubio will travel to Jamnagar to visit Reliance Industries' refining complex, and hinted that Ambani might meet with the U.S. official. Considering that Ambani oversees Reliance Industries, "I think he will be there," Gore said, according to Bloomberg.
Subsequently, in an interview with Indian media NDTV, Gore stated that the reason for visiting Jamnagar was due to Reliance Industries' "astonishing" investment in the oil refining project in the United States. Reliance Industries did not respond to the email CNBC regarding the details of this visit. The US State Department also did not respond to the inquiry CNBC sent outside of working hours.
Apit Chaturvedi, a South Asia consultant from the South Asia consulting firm Teneo, told CNBC that the United States is facing abnormally high diesel prices. As the mid-term elections in November approach, the Trump administration has been seeking ways to increase fuel supply.
He added that Jamnagar has "a considerable export-oriented refining capacity," which provides a sufficient reason for the United States to explore supplies of refined products, including diesel.
Last week, Elon Musk, the founder of SpaceX, claimed that Ambani is the real boss of India. Ambani has been in constant contact with the Trump administration. In March this year, U.S. President Donald Trump thanked Reliance Industries for their “huge investment” in the first new refinery project in the United States in over 50 years.
Reliance Industries, which is majority-owned by the Ambani family, has also become the second-largest buyer of Venezuelan crude oil outside of the United States, despite Indian state-owned enterprises largely not responding to Trump's calls for them to buy more crude oil.
Washington DGA Albright Stonebridge Group Partner Atman Trivedi stated that Rubio will also use this trip to emphasize "Reliance Industries' plan to build a large new refinery in Texas," which is a battleground state with intense competition during the U.S. mid-term elections and attracts national attention.
He added that Sincere Industry is also "in a favorable position to sell diesel" and other refined oil products to the United States.
Jamnagar Refinery, a subsidiary of Reliance Industries, is considered the "largest and most complex single-site refinery" in the world. According to Reliance Industries, its crude oil processing capacity is 1.4 million barrels per day.
