Indian conglomerate Reliance Industries has entered into a one-year agreement with Rosneft, securing a monthly purchase of at least three million barrels of Russian oil, payable in roubles, reported Reuters, citing sources.  

This move aligns with Russian President Vladimir Putin's strategy to bypass Western financial systems amid US and European sanctions, following the geopolitical tensions arising from Russia's actions in Ukraine. 

The deal, which commenced at the start of the Indian financial year on 1 April 2024, entails Reliance acquiring two cargoes monthly, each containing approximately one million barrels of Urals crude, the sources said.  

An option to procure up to four additional cargoes at a $3 discount per barrel against the Middle East Dubai benchmark is also part of the agreement, they added.  

In addition to Urals crude, Reliance Industries will purchase one to two cargoes of low-sulphur oil, predominantly ESPO Blend, from Russia's Pacific port of Kozmino, they said, adding that these cargoes will be priced at a $1 premium per barrel over Dubai quotes.  

The financial transactions for this oil will be conducted through India's HDFC Bank and Russia's Gazprombank, utilising the Russian currency. 

This strategic partnership with Rosneft enables Reliance to secure discounted oil supplies as OPEC+ contemplates extending its voluntary production cuts past June.  

OPEC+, which includes the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia, is scheduled to discuss these cuts in an online meeting in June.  

India, currently one of the largest buyers of seaborne Russian crude, has diversified its payment methods, previously purchasing Russian oil in rupees, dirhams, and Chinese yuan. 

While state-owned Indian refiners have had to rely on spot markets due to challenges in finalising term supplies, this term deal with Rosneft provides Reliance Industries with a more stable supply chain.  

Rosneft, in a statement to the publication, highlighted its ongoing cooperation with Indian companies across production, refining, and trading, though it refrained from commenting on specific agreements. 

As for the payment mechanism details, they remain undisclosed.  

Requests for comments did not elicit a response from HDFC Bank and Gazprombank. Reliance Industries, too, has not commented on the deal, the publication said.