Russia, India forge $13b annual oil deal

Russia’s state oil giant Rosneft has signed a landmark 10-year agreement to supply nearly 500,000 barrels per day (bpd) of crude oil to India’s Reliance Industries, marking the largest energy pact between the two nations.

The deal, valued at approximately $13 billion annually at current prices, underscores deepening energy ties as Russia faces Western sanctions over its conflict with Ukraine.

Sources revealed that the arrangement will supply Rosneft’s Urals crude and other grades to Reliance’s Jamnagar refinery, the world’s largest, in Gujarat. Shipments are set to begin in January, comprising around 20-21 Aframax-sized cargoes monthly. Pricing will be reviewed annually, with Urals crude discounted by $3 per barrel against Dubai benchmarks, while lighter grades command premiums.

This deal, which accounts for nearly half of Rosneft’s seaborne exports, strengthens Russia’s role as India’s primary oil supplier, meeting over one-third of its energy imports. India has capitalised on discounted Russian crude amid sanctions, overtaking the EU as the top buyer.

The agreement comes ahead of Russian President Vladimir Putin’s visit to India, highlighting Russia’s strategic pivot towards Asian markets amid declining demand from China and competition from Middle Eastern oil producers.

Attribution: Reuters

Subediting: M. S. Salama