• Notification Date: 13-12-2024
• Notification No: N/A

Rosneft and Reliance Strike Record-Breaking Energy Deal

In a historic move, the Rosneft of Russia has agreed to sell nearly 500,000 barrels of oil per day to the Reliance Industries of India, thereby marking the largest-ever energy deal among two countries. The deal, which is valued at $13 billion annually based on the recent prices, is set for a duration of 10 years and will supply about 0.5% of the total oil consumption of the world.

The agreement comes amid heavy sanctions on Russia from the West following its appropriation of Ukraine, which has reshaped international energy trade. As the traditional markets of Russia in Europe and the US shrank, India significantly appeared as a key partner with Russian crude oil, which is now accounting for over a third of the imports of India. Before 2022, Russia contributed just 2% to India’s requirements of crude oil.

Reliance, which operates one of the world’s largest refining complexes in Jamnagar, Gujarat, will receive regular shipments of Russian oil, which also includes medium-sulfur Urals and other crude grades. The first deliveries are expected to start in January, with Rosneft supplying 20-21 Aframax-sized cargoes per month totaling around 80,000 to 100,000 tons each.

This deal is expected to further challenge competitors like Saudi Arabia, who have traditionally dominated the oil imports of India. The Indian market, which is one of the fastest-growing consumers of crude in the world, is set to become even more necessary in the international demand for oil. As Reliance continues to capitalize on cheaper Russian oil, the energy landscape in India and beyond is undergoing a considerable shift.

With both companies reviewing volumes and pricing annually, this long-term partnership contemplates growing ties between India and Russia, reshaping international dynamics of oil in the process.