Russia's state-owned oil giant Rosneft has signed a landmark deal to supply 500,000 barrels per day (bpd) of crude to Indian private refiner Reliance Industries in a 10-year contract valued at a whopping $13 billion annually at current prices, Reuters reports.
New, lasting partnership
The deal cements the largest energy partnership between India and Russia, further strengthening ties between the two nations at a time of Western sanctions on Moscow.
Under the agreement, Rosneft will deliver various grades of crude and fuel oil, primarily to Reliance's Jamnagar refinery in Gujarat, the world’s largest refining complex.
The volumes and pricing will be reviewed annually to reflect oil market dynamics.
This deal accounts for about 0.5% of global oil supply and nearly half of Rosneft's seaborne exports, leaving limited availability for other buyers.
India has emerged as the leading importer of Russian crude, benefiting from discounted prices due to Western sanctions imposed after Russia's invasion of Ukraine.
The deal strengthens India’s energy security while intensifying competition for market share among global oil producers, particularly from the Middle East.
Russian oil one-third of energy needs
The supply agreement positions India as a key player in the global energy landscape, with Russian oil continuing to meet more than one-third of the country’s import needs.
Reliance, which has previously sourced crude from Rosneft via intermediaries, declined to comment on the specifics of the deal, citing confidentiality.
The agreement, wrapped up at Rosneft's board meeting in November, will take effect in January 2025 and may be extended for another decade.