Russia and India sign historic oil supply deal
12 December 12:31
Russian oil company Rosneft and Indian giant Reliance Industries have signed a historic deal to supply Russian oil to India, Komersant ukrainskyi reports citing Reuters.
Under the terms of the agreement, Reliance will receive 500,000 barrels of oil daily, which is 0.5% of the world’s supply. Deliveries will begin in January 2024 and will last for 10 years with an option to extend for another 10 years.
India, which has not joined the sanctions against Russia, benefits from cheaper Russian oil, as the sanctions have made it 3-4 dollars per barrel cheaper than other brands. This allows Indian refineries, including the world’s largest complex in Jamnagar, to benefit from the low cost of raw materials. According to the agreement, Rosneft will deliver 20-21 cargoes per month of 80,000-100,000 tons of crude oil, as well as three cargoes of 100,000 tons of fuel oil.
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This deal will be a big challenge for Middle Eastern suppliers, particularly Saudi Arabia, as India becomes an important market in the global energy balance. The growth of Russian oil imports to India comes against the backdrop of slowing demand growth from China, making India one of the main drivers of global oil demand.
Supplies will be reviewed annually depending on changes in the oil markets, and this agreement covers almost half of Rosneft’s marine oil exports from Russian ports, which limits the opportunities for other traders.
At the same time, India is refusing to buy Russian liquefied natural gas under sanctions.
