Russia and India strike largest-ever energy supply deal

13 December 2024

Russia’s state oil firm Rosneft has agreed to supply nearly 500,000 barrels per day (b/d) of crude oil to Indian private refiner Reliance in the biggest ever energy deal between the two countries, Reuters reported citing sources familiar with the deal.

The 10-year agreement amounts to 0.5% of global oil supply and is worth roughly $13 billion a year at today’s prices. Under the deal, Rosneft would deliver 20-21 Aframax-sized cargoes (80,000 - 100,000 tonnes) of various Russian crude grades and three cargoes of about 100,000 tons each of fuel oil each month. The deal accounts for roughly a half of Rosneft’s seaborne oil exports from Russian ports.

The shipments will be supplied for Reliance’s refining complex, the world’s biggest, at Jamnagar in the western state of Gujarat. Supplies will start from January and are set to continue for 10 years with an option to extend the deal for another 10 years.

The majority of the supply will be medium-sulfur and diesel-rich Russian Urals that are most popular with Indian refiners and will be priced at a discount of $3 per barrel to Dubai quotes for the following year. The currency for payments has not been revealed in the Reuters report.

Russian oil accounts for more than a third of India’s energy imports. India became the largest importer of Russian crude after the European Union, previously the top buyer, imposed sanctions on Russian oil imports in response to the 2022 invasion of Ukraine.

From January to October, Reliance imported an average 405,000 b/d of Russian oil, up from 388,500 b/d in the same period last year, according to tanker data.

Source: Reuters