Business

Russia's Rosneft Strikes Massive Oil Supply Deal with India's Reliance

Historic Energy Agreement Between Russia and India

Russia's state-owned oil giant, Rosneft, has reached an unprecedented deal with India's private refiner, Reliance, to supply nearly 500,000 barrels per day (bpd) of crude oil. This landmark agreement, spanning 10 years and valued at approximately $13 billion annually, marks the largest energy deal between the two nations. The deal is set to bolster energy ties between India and Russia, despite Western sanctions on Russia due to its conflict in Ukraine.

Rosneft, Reliance agree biggest ever India-Russia oil supply deal, sources say

Rosneft's silence on the matter contrasts with Reliance's acknowledgment of its partnerships with various international suppliers, including Russia, while maintaining confidentiality over specific commercial agreements. The deal's timing coincides with Russian President Vladimir Putin's planned visit to India and follows U.S. President-elect Donald Trump's aspirations to mediate an end to the Russia-Ukraine war.

Russian oil currently constitutes over a third of India's energy imports, positioning India as the largest importer of Russian crude after the European Union imposed sanctions in response to Russia's 2022 invasion of Ukraine. The sanctions have made Russian oil significantly cheaper, enticing Indian refiners to capitalize on the cost advantage. This shift in import dynamics has posed challenges to traditional Middle Eastern suppliers.

The Reliance-Rosneft deal underscores the intense competition among oil producers for a share in India's rapidly growing energy market. The agreement involves Rosneft delivering various Russian crude grades and fuel oil to Reliance's massive refining complex in Jamnagar, Gujarat. Both parties will review pricing and volumes annually to adapt to market dynamics. This long-term partnership not only solidifies Rosneft's position in the Indian market but also challenges other major oil producers like Saudi Arabia.