Rosneft, the Russian state oil company, has entered into an agreement with Reliance, an Indian private refiner, to supply close to 500,000 barrels per day (bpd) of crude oil, reported Reuters.
This ten-year deal, valued at approximately $13bn (Rbs1.35trn) annually at current prices, represents around 0.5% of the global oil supply.
Under the terms of the deal, Rosneft will deliver monthly shipments to Reliance's Jamnagar refining complex in Gujarat. The deliveries will include various grades of Russian crude and fuel oil.
The deal underscores the energy relationship between India and Russia amidst Western sanctions against Russia due to its actions in Ukraine.
Rosneft has not responded to requests for comment on this landmark deal. On the other hand, Reliance has stated that its commercial agreements are based on prevailing market conditions and involve various international suppliers including those from Russia.
The company has refrained from commenting further on this specific deal, citing the confidentiality of their supply agreements.
The agreement arrives as Russia's President, Vladimir Putin, is expected to visit India and follows statements from US President-elect Donald Trump regarding his intentions to facilitate peace between Russia and Ukraine.
India's reliance on Russian oil has grown significantly, with the nation becoming the largest importer of Russian crude since the EU's sanctions, which were a response to the invasion of Ukraine in 2022.
Without any sanctions on Russian oil, Indian refiners have been capitalising on the more competitively priced supply. The sanctions have rendered Russian oil at least $3–4 cheaper per barrel than other grades, impacting Middle Eastern oil producers, which are losing market share in India.
In 2024, Reliance had a similar agreement with Rosneft for three million barrels of crude monthly, and the two companies have maintained regular transactions through intermediaries.
This new arrangement will consume around half of Rosneft's seaborne oil exports from Russian ports, potentially limiting supply for other traders.
From January to October, Reliance's imports of Russian oil averaged 405,000bpd, an increase from the previous year.
