Rubio to visit Ambani's Jamnagar refinery as U.S. diesel prices surge

U.S. Secretary of State Marco Rubio will visit the Jamnagar refinery complex in Gujarat, India — the world's largest single-site oil refinery, owned by billionaire Mukesh Ambani's Reliance Industries — during a trip to Uzbekistan and India from Oct. 17 to 22, the State Department announced Tuesday. The visit comes as U.S. diesel prices surge ahead of November's midterm elections.

The State Department said Rubio would travel to Samarkand in Uzbekistan and then to Mumbai and Jamnagar, with no stop announced in New Delhi. It said he would meet senior Indian officials and business leaders "to promote opportunities for commercial investment and economic cooperation." It is his second trip to India this year.

Diesel prices and the midterms

The International Energy Agency has warned that constraints on the diesel market will likely keep prices elevated into next year. Diesel costs affect American truckers, farmers and shippers. To ease prices, President Donald Trump earlier this month paused sanctions on Russia to allow supplies from Moscow into the global market.

Experts told CNBC the administration is framing the trip around business deals rather than policy and politics, as Americans focus on the economy before the midterms. Arpit Chaturvedi, South Asia advisor at the strategic advisory firm Teneo, said the U.S. is facing exceptionally high diesel prices and the administration has been looking for ways to increase fuel availability. Jamnagar has "considerable export-oriented refining capacity," making a strong case for the U.S. to explore refined-product supplies, including diesel, he said.

Reliance's U.S. ties

Reliance is investing in a U.S. refinery and is a key buyer of Venezuelan oil. Trump thanked Reliance in March for its "tremendous investment" in the first new U.S. refinery project in 50 years. The company, majority-owned by the Ambani family, has also emerged as the second-largest buyer of Venezuelan crude outside the U.S., even as Indian state-owned firms remain largely unmoved by Trump's appeal to buy more of it.

Atman Trivedi, a partner at Washington-based DGA Albright Stonebridge Group, said Rubio would also use the visit to highlight Reliance's plans for a large new refinery in Texas, a state with heated midterm races. Reliance is "well-positioned to sell diesel" and other refined petroleum products to the U.S., he added.

U.S. Ambassador to India Sergio Gor said Rubio would visit the Reliance refining complex and hinted that Ambani would meet him, telling Bloomberg, "I'd imagine he'd be there." Gor later told Indian outlet NDTV the Jamnagar stop was scheduled given Reliance's "incredible" investment in the U.S. refinery project. Reliance did not respond to emails from CNBC seeking details, and the State Department did not respond to queries sent outside working hours.

The Jamnagar refinery has crude processing capacity of 1.4 million barrels per day, according to Reliance.

Source: CNBC Top News.