Report: Reliance to Purchase Russian Oil from Rosneft in Roubles | Business News

India’s Reliance Industries, operator of the world’s biggest refining complex, has made a strategic move by signing a one-year deal with Russia’s Rosneft to purchase at least 3 million barrels of oil a month in roubles. This shift to rouble payments comes in response to Russian President Vladimir Putin’s call for alternative trading systems to bypass Western financial sanctions.

The term deal with Rosneft not only secures discounted oil rates for Reliance but also aligns with the expected extension of voluntary supply cuts by the OPEC+ group of oil producers. The OPEC+ group, which includes OPEC and allies like Russia, is set to discuss output cuts in an online meeting on June 2.

India, as the world’s third-largest oil importer and consumer, has emerged as the top buyer of seaborne Russian crude amid Western sanctions on Moscow post the 2022 Ukraine invasion. The country has previously paid for Russian crude in various currencies like rupees, dirhams, and Chinese yuan.

State-owned Indian refiners have resorted to spot markets for Russian oil due to the inability to finalize term supplies for this year. Rosneft emphasized the strategic partnership with Indian companies, highlighting collaborations in production, refining, and trading of oil and petroleum products.

Under the terms of the deal, Reliance will purchase Urals crude and low-sulphur crude oil at discounted and premium rates, respectively. The payment for the oil will be facilitated through India’s HDFC Bank and Russia’s Gazprombank, with further details on the payment mechanism yet to be disclosed.

This deal signifies a significant step towards strengthening energy ties between India and Russia, showcasing a strategic shift in oil trade dynamics amidst global geopolitical challenges.