Unique-Rosneft, Reliance agree largest ever India-Russia oil provide deal, sources say

NEW DELHI/MOSCOW (Reuters) – Russia’s state oil agency Rosneft has agreed to provide practically 500,000 barrels per day (bpd) of crude to Indian non-public refiner Reliance within the largest ever power deal between the 2 nations, three sources aware of the deal mentioned.

The ten-year settlement quantities to 0.5% of world provide and is value roughly $13 billion a 12 months at immediately’s costs. It will additional cement power relations between India and Russia, which is underneath heavy Western sanctions over its invasion of Ukraine.

Rosneft didn’t reply to requests for feedback.

Reliance mentioned it really works with worldwide suppliers, together with from Russia, and offers are based mostly on market situations. The corporate declined additional touch upon industrial issues, citing the confidentiality of provide agreements.

The deal comes forward of the deliberate go to by Russian President Vladimir Putin to India and after U.S. President-elect Donald Trump mentioned he desires to push Moscow and Kyiv to cease the warfare as quickly as he takes workplace in January.

Russian oil accounts for greater than a 3rd of India’s power imports. India turned the biggest importer of Russian crude after the European Union, beforehand the highest purchaser, 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 provide. Sanctions have made Russian oil cheaper than rival grades by at the least $3 to $4 per barrel.

India’s rising Russian imports have come on the expense of rival Center Japanese producers. The Reliance-Rosneft deal would signify one other problem for rivals, together with Saudi Arabia.

Competitors amongst oil producers for a share of the Indian market is scorching as a result of it is among the fastest-growing power markets, and is changing into extra essential as a driver of world demand as development in prime importer China slows.

Below the deal, Rosneft would ship 20-21 Aframax-sized cargoes (80,000 to 100,000 metric tons) of varied Russian crude grades and three cargoes of about 100,000 tons every of gas oil every month, the three sources mentioned.

The shipments shall be provided for Reliance’s refining complicated, the world’s largest, at Jamnagar within the western state of Gujarat.

Two sources mentioned Reliance and Rosneft will evaluation pricing and volumes yearly underneath the deal to consider oil markets dynamics.

In 2024, Reliance had a take care of Rosneft to buy 3 million barrels of crude a month. Rosneft has been additionally promoting crude to Reliance through intermediaries frequently.

The brand new deal accounts for roughly a half of Rosneft’s seaborne oil exports from Russian ports, which leaves not a lot provide out there for different merchants and middlemen, one supply mentioned.

From January to October, Reliance imported a median 405,000 barrels per day of Russian oil, up from 388,500 bpd in the identical interval final 12 months, based on tanker knowledge obtained from sources.

The brand new deal between Rosneft and Reliance was mentioned and authorized throughout Rosneft’s board assembly in November, two of the sources mentioned.

Provides will begin from January and are set to proceed for 10 years with an possibility to increase the deal for an additional 10 years, the three sources mentioned.

The pricing of the grades to be provided on delivered foundation is ready at differentials to the common Dubai value of the loading month, based on the sources.

Premiums for the sunshine candy grades have been set at round $1.50 a barrel for ESPO, Sokol at about $2 per barrel and Siberian Mild at about $1 per barrel towards Dubai quotes for 2025, one supply mentioned.

Nearly all of the availability shall be medium-sulphur and diesel-rich Russian Urals which might be hottest with Indian refiners and shall be priced at a reduction of $3 per barrel to Dubai quotes for the next 12 months, two sources mentioned.