NEW DELHI/MOSCOW: Russia’s state oil firm Rosneft has agreed to supply nearly 500,000 barrels per day (bpd) of crude to Indian private refiner Reliance in the biggest ever energy deal between the two countries, three sources familiar with the deal said.
The 10-year agreement amounts to 0.5% of global supply and is worth roughly $13 billion a year at today’s prices. It would further cement energy relations between India and Russia, which is under heavy Western sanctions over its invasion of Ukraine.
Rosneft did not reply to requests for comments.
Reliance said it works with international suppliers, including from Russia, and deals are based on market conditions. The company declined further comment on commercial matters, citing the confidentiality of supply agreements.
The deal comes ahead of the planned visit by Russian President Vladimir Putin to India and after U.S. President-elect Donald Trump said he wants to push Moscow and Kyiv to stop the war as soon as he takes office in January.
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.
India has no sanctions on Russian oil, so refiners there have cashed in on the cheaper crude supply. Sanctions have made Russian oil cheaper than rival grades by at least $3 to $4 per barrel.
India’s rising Russian imports have come at the expense of rival Middle Eastern producers. The Reliance-Rosneft deal would represent another challenge for competitors, including Saudi Arabia.
Competition among oil producers for a share of the Indian market is hot because it is one of the fastest-growing energy markets, and is becoming more important as a driver of global demand as growth in top importer China slows.
Under the deal, Rosneft would deliver 20-21 Aframax-sized cargoes (80,000 to 100,000 metric tons) of various Russian crude grades and three cargoes of about 100,000 tons each of fuel oil each month, the three sources said.
The shipments will be supplied for Reliance’s refining complex, the world’s biggest, at Jamnagar in the western state of Gujarat.
Two sources said Reliance and Rosneft will review pricing and volumes every year under the deal to factor in oil markets dynamics.
In 2024, Reliance had a deal with Rosneft to purchase 3 million barrels of crude a month. Rosneft has been also selling crude to Reliance via intermediaries on a regular basis.
The new deal accounts for roughly a half of Rosneft’s seaborne oil exports from Russian ports, which leaves not much supply available for other traders and middlemen, one source said.
From January to October, Reliance imported an average 405,000 barrels per day of Russian oil, up from 388,500 bpd in the same period last year, according to tanker data obtained from sources.
The new deal between Rosneft and Reliance was discussed and approved during Rosneft’s board meeting in November, two of the sources said.
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 three sources said.
The pricing of the grades to be supplied on delivered basis is set at differentials to the average Dubai price of the loading month, according to the sources.
Premiums for the light sweet grades were set at around $1.50 a barrel for ESPO, Sokol at about $2 per barrel and Siberian Light at about $1 per barrel against Dubai quotes for 2025, one source said.
The majority of the supply will be medium-sulphur 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, two sources said.
