Reliance Industries, the largest refining complex in the world, and Rosneft, the Russian oil company, have inked a one-year agreement for the purchase of at least 3 million barrels of oil per month in roubles, four people with knowledge of the agreement told Reuters.
The move to rouble payments comes in response to Russian President Vladimir Putin’s demands that, in order to support commerce despite sanctions imposed by the United States and Europe, Moscow and its trading partners find alternatives to the Western banking system.
At a time when the OPEC+ group of oil producers is anticipated to continue voluntary production restrictions beyond June, a term arrangement with Rosneft also assists privately held Reliance in securing crude at discounted rates.
On June 2, an online meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, is scheduled to debate the output restrictions.
Following the West’s suspension of sales and imposition of sanctions on Moscow following Russia’s invasion of Ukraine in 2022, India—the third-largest oil importer and consumer in the world—has emerged as the primary purchaser of Russian petroleum transported by sea. Additionally, India has paid for Russian oil using Chinese yuan, dirhams, and rupees.
Meanwhile, because they were unable to finalize term supply for this year, state-owned Indian refiners have been turning to the spot market for Russian oil, as previously reported by Reuters.
In an email answer to queries from Reuters, the Russian oil giant stated, “India is a strategic partner for Rosneft Oil Company.” It also stated that it does not comment on private agreements with partners.
“Projects in the fields of oil and petroleum product production, trading, and refining are included in cooperation with Indian companies.”
Additionally, Rosneft stated that all businesses, whether they are privately held or under state control, use the same commercial methods to assess the value of sold petroleum.
