Gautam Adani and Mukesh Ambani profit from surging coal, oil amid Ukraine war fallout

The two richest men in Asia are finding it hard to kick the fossil-fuel habit as the conflict in Europe stokes demand for coal and oil, sending prices soaring

Adani, net worth US$106 billion, added about US$25 billion to his wealth since the war started. Ambani’s fortune increased by US$8 billion to US$92.4 billion

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Mukesh Ambani, chairman and managing director of Reliance Industries Ltd, which is snapping up distressed crude-oil cargoes at discounts to feed its refining complex, the biggest in the world. Photo: Reuters

Published: 10:07am, 19 May 2022

Gautam Adani and Mukesh Ambani are profiting from a surge in global commodity prices triggered by Russia’s invasion of Ukraine, burnishing their fossil-fuel credentials even as Asia’s richest men publicly push their pivots toward greener energy.

With coal prices skyrocketing to a record, Adani’s conglomerate is expanding a controversial mine in Australia to meet demand. Ambani’s Reliance Industries Ltd. is snapping up distressed crude-oil cargoes at discounts to feed its refining complex, the biggest in the world. Reliance even deferred a scheduled maintenance of the facility to help churn out more diesel and petrol, whose margins have shot up to touch a three-year high.

The two Indian tycoons are stepping in at a time when many developed countries are scrambling for alternative sources of fuels as they try to back away from Russian supplies. This month, the Group of Seven most-industrialised nations pledged to ban imports of Russian oil. The disruption has also brought the focus back on the need for more coal, the dirtiest fossil fuel the world has vowed to phase out to cut emissions.

A machine stockpiles coal at a port in Newcastle, Australia. Gautam Adani’s conglomerate is expanding a controversial Australian coal mine. Photo: Reuters

Though Adani, 59, and Ambani, 65, have unveiled a combined US$142 billion in green investments over the next few decades in a pivot away from coal and oil – the bedrock of their empires – they are also finding it hard to kick the fossil-fuel habit as the conflict stokes demand. Global coal demand is expected to rise to a record level in 2022 and stay there through 2024, according to the International Energy Agency.

The war has created a tailwind for fossil fuel-based firms in India, said Chakri Lokapriya, managing director and chief investment officer at TCG Advisory Services Pvt. in Mumbai.

“The collateral damage is that fossil fuels will continue to play a vital role the next 20 years or more,” he said, adding that it was sufficient time to reap benefits from carbon-based investments.

Representatives for Adani Group and Reliance Industries did not respond to an email requesting comments.