Reliance Industries and Rosneft sign largest oil supply agreement between India and Russia: Report

Rosneft, Russia’s state-owned oil giant, has reached an agreement to supply nearly 500,000 barrels per day of crude oil to Reliance Industries (RIL), marking the largest energy deal ever between the two countries, according to three sources familiar with the matter. Ranking.

The ten-year deal, which represents 0.5 percent of global oil supplies, is worth about $13 billion annually at current prices. This agreement is expected to strengthen energy relations between India and Russia, especially since Russia faces severe Western sanctions due to its invasion of Ukraine, according to Reuters.

Business today He was unable to independently verify the development.

The report added that Rosneft did not respond to requests for comment. RIL declined to provide further details on the business matters, citing secrecy surrounding the supply agreements.

As part of the agreement, Rosneft will supply 20-21 Aframax-sized cargoes (80,000 to 100,000 metric tons) of various grades of Russian crude and three cargoes each of approximately 100,000 tons of fuel oil per month. The shipments will be directed to Reliance’s Jamnagar refining complex in Gujarat, the world’s largest refinery.

The agreement comes ahead of Russian President Vladimir Putin’s scheduled visit to India, and after comments from US President-elect Donald Trump, who indicated his intention to push for an end to the war in Ukraine as soon as he takes office in January.

The Reuters report added that this deal represents about half of Rosneft’s seaborne oil exports from Russian ports, leaving limited availability for traders and other intermediaries.

India does not impose any sanctions on Russian oil, allowing its refineries to benefit from lower-priced crude oil. Because of the sanctions, Russian oil is sold at a discount of at least $3 to $4 per barrel compared to competing crudes.

Competition is intense among oil producers for a share of the Indian market, as the country is one of the fastest growing energy markets and plays an increasingly important role in global demand, especially with the slowdown in growth in China.

India, the world’s third-largest oil importer and consumer, became the main buyer of Russian seaborne crude after Western countries stopped buying it in response to the Russian invasion of Ukraine in 2022. India was also paying for Russian oil in rupees and dirhams. And the Chinese yuan.

Earlier this year, Reliance, controlled by Mukesh Ambani, signed a one-year deal with Rosneft to buy at least 3 million barrels of oil per month in rubles. This deal came in the wake of Russian President Putin pushing Moscow and its partners to find alternatives to the Western financial system to facilitate trade despite US and European sanctions.

In 2024, the Indian government reportedly urged state-run oil refineries and Reliance Industries to negotiate a long-term supply deal with Russia. The government has sought to secure at least 33% of contracted supplies from Russia at a fixed discount to help cushion the Indian economy from volatile prices, according to sources.

Meanwhile, state-owned Indian refiners are buying Russian oil in the spot market, as they have been unable to finalize fixed-term contracts for this year.