📷 Image Credits: Moneycontrol
Reliance Industries, the operator of the world\u2019s biggest refining complex, has recently signed a one-year deal with Russia\u2019s Rosneft to purchase at least 3 million barrels of oil per month in roubles, according to sources. This strategic move by Reliance comes as Russian President Vladimir Putin advocates for alternative trading methods amidst Western financial system sanctions. The agreement not only allows Reliance to secure oil at discounted rates but also coincides with the anticipated extension of voluntary supply cuts by the OPEC+ group of oil producers.
The OPEC+ group, consisting of OPEC and allied countries like Russia, is scheduled to hold discussions regarding output cuts in an upcoming online meeting on June 2. India, being the world’s third-largest oil importer and consumer, has emerged as the largest purchaser of seaborne Russian crude following the cessation of Western purchases and sanctions imposed post Russia’s 2022 invasion of Ukraine. The mode of payment for Russian crude by India has varied, including rupees, dirhams, and Chinese yuan.
Indian state-owned refiners have resorted to spot market purchases of Russian oil due to the inability to finalize term supplies for this year. Rosneft, acknowledging India as a strategic partner, mentioned collaboration in various domains like oil production, refining, and trading. The company refrained from disclosing details of confidential agreements. Reliance has confirmed the deal at the beginning of the Indian financial year starting April 1.
Under the terms of the deal, Reliance will procure two cargoes of approximately one million barrels of Urals crude each month, with an option for an additional four cargoes at a discount of $3 per barrel to Dubai benchmarks. Additionally, the company will purchase one to two cargoes monthly of low-sulphur crude oil, particularly ESPO Blend, at a premium of $1 per barrel to Dubai quotes. Payment for the oil will be facilitated through Russia’s rouble via HDFC Bank and Russia’s Gazprombank.
