Russia’s state-owned oil company Rosneft has finalized a significant agreement to supply nearly 500,000 barrels per day (bpd) of crude oil to India’s Reliance Industries. This 10-year partnership, valued at an estimated $13 billion annually at current prices, marks the largest oil supply deal between the two nations and highlights the deepening energy ties between Russia and India.
The agreement includes the delivery of 20 to 21 Aframax-sized cargoes monthly, each carrying 80,000 to 100,000 metric tons of various Russian crude grades. Additionally, Rosneft will supply three cargoes of about 100,000 metric tons of fuel oil every month. This substantial deal emphasizes Russia’s strategic pivot to Asian markets as Western nations reduce their dependence on Russian energy following the invasion of Ukraine.
India has steadily increased its imports of Russian crude, capitalizing on discounted rates offered in the wake of sanctions. In July, India surpassed China as the largest importer of Russian oil, importing 2.07 million bpd—a 4.2% increase from the previous month and a 12% year-over-year rise. Indian refiners have been purchasing Russian oil, including ESPO Blend crude, at favorable prices. This grade saw a jump in imports to 188,000 bpd in July as refiners utilized larger Suezmax vessels for transport. While Chinese refiners have traditionally dominated the ESPO market, they have recently scaled back purchases due to weaker domestic fuel demand, creating an opening for India to expand its imports.
Indian refining sources suggest that the country’s demand for Russian oil will continue to grow, provided there are no further sanctions. This trend underscores India’s focus on securing affordable energy supplies to meet its growing needs. However, India is not solely reliant on Russia. The country is actively seeking to diversify its energy sources to bolster energy security. During a recent visit to Guyana, Indian Prime Minister Narendra Modi described the South American nation as a key potential partner in India’s energy strategy and encouraged Indian businesses to invest in Guyana’s energy sector. Although no formal agreements have been reached, discussions are ongoing, with Indian officials emphasizing the importance of predictable energy partnerships.
The Rosneft-Reliance agreement underscores the evolving dynamics of global energy trade. India’s decision to deepen its reliance on Russian oil reflects a pragmatic approach to securing affordable energy amidst geopolitical uncertainties. Meanwhile, Russia’s move to strengthen ties with India highlights its efforts to maintain a foothold in global energy markets as it shifts away from its traditional Western buyers.
As India continues to strengthen its energy partnerships with Russia and explores opportunities in countries like Guyana, the nation positions itself as a major player in the global energy landscape. Balancing economic priorities with geopolitical challenges, India demonstrates a strategic approach to securing energy for its growing population and industrial needs.
