India’s leading private refiner, Reliance Industries, has inked a one-year agreement with Russia’s top oil producer, Rosneft, to purchase at least two cargoes of Urals crude per month, paid in Russian rubles, according to Reuters.
This deal is set to commence from April 1 and involves buying two cargoes of approximately 1 million barrels each month, with an option to buy up to four additional cargoes monthly.
The agreement stipulates a discount of $3 per barrel against the Middle Eastern Dubai benchmark.
Rosneft declined to comment on the confidential nature of the trade agreements but acknowledged India as a strategic partner.
Indian refiners, adapting to Western sanctions on Russian oil, have paid for Russian crude in various currencies, including Indian rupees, Chinese yuan, and UAE dirhams.
These sanctions include an embargo and a $60 per barrel price cap on Russian crude if it uses Western insurance, reinsurance, shipping, or financing.
Russia has become India’s largest oil supplier for the second consecutive fiscal year. This surge in Russian oil imports has significantly reduced the share of OPEC and Middle Eastern oil supplies to India.
In the fiscal year ending March 31, 2024, the Middle East’s share of India’s oil imports dropped to a record low of 46%, down from 55% in the previous fiscal year.
Despite the flat volume of India’s crude oil imports in the fiscal year 2023/2024, the import bill for the world’s third-largest oil importer decreased by nearly 16%, attributed to lower oil prices and record-high imports of cheaper Russian crude.
