India and Russia have finalized their largest-ever oil trade agreement, deepening ties between the two nations. Under the deal, Russia’s state-owned oil company Rosneft will supply 500,000 barrels of crude oil daily to India’s Reliance Industries. Valued at $13 billion annually at current prices, this landmark agreement is set to begin in January.
Record Oil Supply to Boost Bilateral Ties
This deal marks a significant milestone in India-Russia energy relations, insiders revealed. It includes an option to extend the arrangement for an additional ten years, ensuring a long-term partnership. With Western sanctions limiting its traditional markets, Russia has turned to countries like India and China to sustain oil exports.
India, benefiting from discounted Russian crude, has emerged as a crucial energy partner for Russia. This agreement underscores their growing interdependence and reflects the shifting dynamics in global energy trade.
$13 Billion Annual Trade and Strategic Importance
The ten-year agreement accounts for 0.5% of the global oil supply and is worth an estimated $13 billion annually. Rosneft has not commented on the deal, while Reliance stated that it collaborates with multiple international suppliers, including Russian ones, but declined to provide further details, citing confidentiality.
Insiders revealed that Rosneft’s board discussed and approved the agreement in November. The deal precedes a planned visit by Russian President Vladimir Putin to India, emphasizing its strategic and economic significance.
India Leads in Russian Oil Imports
Russian crude now makes up more than one-third of India’s oil imports, making India the largest importer of Russian oil. Previously, the European Union held this position before sanctions were imposed following Russia’s invasion of Ukraine.
The discounted oil, priced $3 to $4 per barrel lower than alternatives, has made Russian crude more attractive to India. This shift has reduced India’s reliance on Middle Eastern suppliers like Saudi Arabia. With its rapidly growing energy market, India continues to be a key battleground for global oil producers vying for long-term dominance.
