Reliance Inks Deal With Russia's Rosneft; To Buy Oil In Roubles: Report

India has emerged as the leading purchaser of seaborne Russian crude following the West's embargo and sanctions on Moscow after Russia's 2022 invasion of Ukraine

Reliance Industries, operator of the world’s largest refining complex, has entered into a one-year agreement with Russia's Rosneft to purchase at least 3 million barrels of oil per month in roubles, according to four sources familiar with the deal told news agency Reuters. This strategic shift in payment currency aligns with Russian President Vladimir Putin's initiative to circumvent the Western financial system amid ongoing US and European sanctions.

This agreement not only secures a steady supply of discounted oil for Reliance but also marks a significant move in the global oil market as the OPEC+ group of oil producers is poised to extend voluntary supply cuts beyond June. The OPEC+ alliance, which includes the Organisation of the Petroleum Exporting Countries (OPEC) and its allies such as Russia, is set to discuss the extension of these cuts in an online meeting on June 2.

India, currently the world's third-largest importer and consumer of oil, has emerged as the leading purchaser of seaborne Russian crude following the West's embargo and sanctions on Moscow after Russia's 2022 invasion of Ukraine. In response to the sanctions, India has diversified its payment methods for Russian crude, utilising rupees, dirhams, and Chinese yuan.

State-owned Indian refiners have been actively engaging in the spot market for Russian oil due to challenges in finalising long-term supply contracts for this year, as previously reported by Reuters.

In an emailed response to Reuters, Rosneft emphasised India's strategic importance as a partner. "India is a strategic partner for Rosneft oil company," the statement read, highlighting that their collaboration spans production, refining, and trading of oil and petroleum products. Rosneft also affirmed that their commercial valuation methods for crude sales are consistent across all partnerships, regardless of whether the companies are privately or state-owned.

Reliance Industries has yet to comment on this development.