Russia and India sign largest-ever oil deal - Reuters
Illustrative photo: Rosneft has signed the largest ever contract with India (Getty Images)
The Russian state oil company Rosneft and the Indian private oil refining giant Reliance Industries have signed a record-breaking deal to supply 500,000 barrels of oil daily for the next 10 years, Reuters reports.
It is noted that this makes the deal the largest energy partnership between the two countries, worth $13 billion a year at current market prices.
Key details of the deal:
- Rosneft will supply 20–21 Aframax-sized shipments and three fuel oil cargoes monthly to Reliance’s refinery complex in Jamnagar, Gujarat.
- The deal includes an annual review of terms, with prices determined based on Dubai oil market quotations.
- Deliveries will start in January 2025, with the potential to extend the deal for another 10 years.
India, which does not support sanctions against Russia, has become the largest importer of Russian oil following the EU's reduction in purchases. Discounts on Russian oil grades such as Urals provide significant economic benefits for Indian refiners.
This deal also challenges Middle Eastern oil producers, particularly Saudi Arabia, as competition for India’s market share remains intense.
Sanctions on Rosneft
After the start of Russia's full-scale invasion of Ukraine, numerous sanctions were imposed on Russia, including on its oil industry.
Rosneft, Russia’s largest oil company, has faced global restrictions, along with Russian oil itself.
For instance, sanctions on Russian oil included a maritime import embargo. As of February 2023, the embargo was extended to oil products (e.g., diesel fuel). Later, the G7 countries, the EU, and Australia introduced a price cap on Russian oil.
Sanctions against Rosneft include:
- Freezing of Rosneft’s assets. The company’s leadership, including CEO Igor Sechin, is under personal sanctions.
- European and American companies ceased cooperation with Rosneft, including joint extraction and technology projects.
- Rosneft’s access to international financial markets and loans has been restricted.
US President Joe Biden’s administration is preparing new sanctions against Russian oil exports.
An expert told RBC-Ukraine about the conditions under which India might stop importing Russian oil.
