News Brief

Reliance To Buy Russian Crude Oil In Roubles To Avoid Sanctions, Signs Deal With Rosneft For 3 Million Barrels Per Month

Nishtha Anushree

May 28, 2024, 06:48 PM | Updated 06:48 PM IST

Jamnagar oil refinery
Jamnagar oil refinery

A deal has been signed by Reliance Industries Limited for Russian crude oil. As per this deal, Russia's Rosneft will sell at least 3 million barrels of oil per month to the Indian refiner in Roubles.

This comes after an earlier report that claimed that the Indian government has urged state-run oil refiners and Reliance to negotiate a long-term supply deal for Russian crude oil.

The shift to the Russian currency Rouble comes after President Vladimir Putin urged to find trading alternatives amid sanctions imposed by the US and Europe following the Ukraine war.

The deal will help Reliance to secure crude oil at discounted prices. It is significant because oil producers of the OPEC+ group are expected to continue voluntary supply cuts after June as well.

India is the second-largest purchaser of Russian crude oil. The deals have been in the Indian Rupee as well. Rosneft considers India a strategic partner, as per its e-mail response to Economic Times.

The deal has been in effect since 1 April. Under it, Reliance will buy two cargoes of about one million barrels of Urals crude and one to two cargoes a month of low-sulphur crude oil.

There is an option to buy four more cargoes of Urals crude every month at a discount of $3 per barrel to the Middle East Dubai benchmark. Earlier, India was expecting a discount of $5 per barrel.

Meanwhile, the state-run refiners are yet to enter into a deal with Russian suppliers because they have not finalised the terms. Earlier, Indian Oil had a long-term supply deal with Russia, which expired at the end of March.

Nishtha Anushree is Senior Sub-editor at Swarajya. She tweets at @nishthaanushree.

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