India and Russia have signed their largest oil trade agreement, strengthening their growing energy partnership. Under the deal, Rosneft, Russia’s state-owned oil company, will supply 500,000 barrels of crude oil daily to Indian refiner Reliance Industries. The agreement, valued at $13 billion annually at current prices, will begin in January.
Landmark Oil Deal Reflects Stronger Ties
The agreement marks a turning point in India-Russia energy relations and is the largest oil deal between the two countries. The contract also includes an option to extend the arrangement for another ten years, ensuring a long-term collaboration.
Russia has been increasingly pivoting to countries like India and China to maintain oil exports amid Western sanctions over its invasion of Ukraine. These sanctions have forced Russia to sell oil at discounted rates, providing a key opportunity for India to benefit from lower prices.
$13 Billion Annual Trade and Strategic Gains
This agreement accounts for 0.5% of global oil supply, with an annual value estimated at $13 billion. Rosneft has not commented on the deal, while Reliance confirmed it works with multiple international suppliers, including Russian companies, but did not disclose specific details due to confidentiality agreements.
Insiders revealed that Rosneft’s board approved the agreement in November. The announcement coincides with a planned visit to India by Russian President Vladimir Putin, highlighting the deal’s strategic and economic importance.
India Dominates Russian Oil Imports
Russian oil now constitutes more than one-third of India’s energy imports, making India the largest importer of Russian crude. Previously, the European Union held this position before it imposed sanctions on Russia in 2022.
India’s access to discounted Russian oil, priced $3 to $4 per barrel lower than alternatives, has reduced its dependence on Middle Eastern suppliers like Saudi Arabia. As one of the world’s fastest-growing energy markets, India remains a critical player in shaping global oil trade dynamics.
