India’s Reliance Industries, which runs the world’s largest refining complex, has made a deal with Russia’s Rosneft to buy at least 3 million barrels of oil per month for one year. The payments will be made in roubles, according to four sources who spoke to Reuters.
This change to rouble payments comes after Russian President Vladimir Putin’s call for Moscow and its trading partners to find ways to trade outside the Western financial system, due to U.S. and European sanctions.
The deal with Rosneft helps Reliance secure oil at discounted prices, especially as the OPEC+ group of oil producers is expected to extend supply cuts beyond June.
The OPEC+ group, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, will discuss these cuts in an online meeting on June 2.
India, the third-largest oil importer and consumer in the world, has become the top buyer of Russian oil transported by sea. This shift happened after the West stopped buying Russian oil and imposed sanctions following Russia’s 2022 invasion of Ukraine. India has also paid for Russian oil in rupees, dirhams, and Chinese yuan.
State-owned Indian refiners have been buying Russian oil from spot markets because they couldn’t finalize long-term supply deals for this year, Reuters previously reported. “India is a strategic partner for Rosneft oil company,” Rosneft said, adding that it doesn’t comment on confidential agreements with partners. “Cooperation with Indian companies includes projects in production, oil refining, and trading of oil and petroleum products.”
Rosneft also stated that the way they determine the value of the sold crude is the same for all companies, whether private or state-controlled.
Reliance did not respond to a request for comment.
Starting April 1, under the deal, Reliance will buy two shipments of about one million barrels of Urals crude each month, with an option to buy four more, at a discount of $3 per barrel compared to the Middle East Dubai benchmark, according to the sources.
Additionally, Reliance will buy one to two shipments per month of low-sulphur crude oil, mainly ESPO Blend from Russia’s Pacific port of Kozmino, at a premium of $1 per barrel to Dubai quotes.
Reliance will pay for the oil in roubles through India’s HDFC Bank and Russia’s Gazprombank, the sources said. Further details on the payment process were not immediately available.
HDFC Bank and Gazprombank did not respond to requests for comment.
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