Wednesday, April 29, 2009

New US Sanctions Vs Reliance Industries

US imposes Sanctions on various countries to retain its internal interests. This is very common ever since the super power wanted to curtail terrorism, money laundering and on the other side hiding its own insecurities. The current lever is not to let Iran become a nuclear power superseding the interests of United States and the only way they can achieve this objective is to curtail business opportunities with Iran by the other countries.
Reliance industries have the world's largest capacity of refining the worst crude oil in its Jamnagar facility. This gives Reliance an edge of refining almost 30% of Iran refined gasoline and boosts Indian economy by bringing in a major portion of export revenue. Now under the new sanctions levied by US, Reliance along with other major oil giants like British Petroleum, Vitol and Glencore can either trade with US or with Iran and not both. This will be a major bottleneck for Reliance Industries who are experts in oil refining industry world wide. Being one of the world leading supplier of refined petroleum products to Iran and other countries, Reliance now has a wider challenge in hand. There is no other super power in the world that dares to levy such sanctions that can curtail business with US for what so ever reasons and this is the advantage for United States.
The only wish is that this will not be another game plan like what happened with Iraq. In the pretext of anxieties of US on Iraq thought to be provoking a biological war and Geo-politics, US war on Iraq only proved to be a major failure, killing millions of people and losing thousands of US soldiers resulting in no bigger difference to the rest of the world. Iran being one of the world's largest producer of crude oil, may now take up a strategy of improving its refining capabilities as a response to US new sanctions. Such a step would only be a win-win situation for Iran and No profit-No loss zone for US. The loser in this gamble will be Indian Economy losing its major share of oil export business to Iran and of course, our dear Reliance Industries.

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