Rosneft has signed a 10-year agreement to supply approximately 500,000 barrels per day (bpd) of crude oil to Reliance Industries, Reuters reported, citing three sources familiar with the matter.
The deal between Russia’s state-owned oil company and the Indian conglomerate is valued at around $13bn annually at current prices. It is considered the largest energy partnership between the two nations and represents 0.5% of global crude supply.
The agreement is a significant development amid ongoing geopolitical shifts, with Russia looking to bolster its energy exports to Asia following Western sanctions imposed in response to its 2022 invasion of Ukraine.
According to the news agency, Reliance Industries confirmed its partnerships with international suppliers, including Russian entities. However, the group declined to provide further details, citing the confidentiality of commercial agreements.
Sources familiar with the deal revealed to Reuters that shipments will primarily support Reliance Industries’ refinery complex in Jamnagar, Gujarat.
Each month, Rosneft will deliver between 20 and 21 Aframax-sized cargoes, carrying 80,000 to 100,000 metric tonnes of crude oil, alongside three fuel oil cargoes of approximately 100,000 metric tonnes each.
The pricing mechanism ties crude grades to the average Dubai price for the loading month. Light sweet grades such as ESPO and Sokol will carry premiums of $1.5 and $2 per barrel, respectively, while Siberian Light will be priced at a $1 premium. Medium-sulphur Urals, a preferred grade for Indian refiners, will be sold at a $3 discount to Dubai quotes.
Reliance Industries and Rosneft will review pricing and volumes annually to account for fluctuations in oil market dynamics. Supplies under the deal will commence in January 2024 and continue for a decade, with an option to extend for an additional 10 years.
India has become a pivotal market for Russian oil, with imports reaching approximately 1.9 million barrels per day in September 2024, accounting for around 40% of India’s monthly crude imports.
This marks a sharp increase from the previous fiscal year when Russian crude made up 35% of India’s total imports, compared to 23% a year earlier. The rise is largely driven by discounted prices offered by Russia, which reportedly helped India save over $25bn in foreign exchange during the fiscal year ending March 2024.
