AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Rosneft signs a decade-long crude supply agreement with Reliance.
- India strengthens energy ties with Russia amidst global shifts.
- The agreement represents a significant share of Rosneft's exports.
In a significant development for the global energy market, Russia’s state-owned oil producer Rosneft (ROSN) has finalized a decade-long crude supply agreement with India’s Reliance Industries (RELIANCE). This partnership aims to supply 500,000 barrels per day (bpd) of crude oil, valued at approximately $13 billion annually at current market prices.
A Strategic Energy Alliance
The agreement between Rosneft and Reliance reinforces the strong energy ties between India and Russia, solidifying the largest energy partnership between the two nations. At a time when Western sanctions have restricted Moscow's global trade dynamics, this deal allows Russia to channel significant crude oil volumes to India, a key energy market.
The contract will supply various grades of crude and fuel oil primarily to Reliance’s Jamnagar refinery in Gujarat, the world’s largest refining complex. Under the terms, both parties will annually review volumes and pricing to align with global oil market fluctuations.
Impact on Global Oil Supply
This agreement accounts for roughly 0.5% of global oil supply and represents almost half of Rosneft's seaborne crude exports. This leaves limited availability for other global buyers and intensifies competition among major oil producers for market share.
India has emerged as the top importer of Russian crude, leveraging competitive pricing amid Western sanctions imposed following the Ukraine conflict. This positions India strategically in the global energy landscape, securing its energy requirements while fostering strong trade relations with Russia.
India’s Growing Energy Role
Russian crude continues to play a pivotal role in India’s energy matrix, meeting over one-third of the country’s crude oil import needs. The agreement further underscores India’s emergence as a major player in global energy trade. Reliance, which has historically sourced Russian crude through intermediaries, will now gain direct access to consistent supplies under the agreement.
Set to commence in January 2025, the deal aligns with both nations’ goals of ensuring long-term energy security and exploring mutually beneficial trade opportunities. The agreement, concluded during Rosneft’s November board meeting, also includes the possibility of an extension for another decade.
This landmark partnership not only strengthens energy ties between Russia and India but also reshapes global crude oil trade patterns, reflecting the evolving geopolitical landscape.
