India and Russia have reached their largest oil trade agreement to date, solidifying their energy partnership. The deal will see Rosneft, Russia’s state-owned oil giant, supply 500,000 barrels of crude oil per day to Indian refiner Reliance Industries. With an annual value of $13 billion at current prices, the agreement is set to begin in January.
Massive Oil Agreement Deepens Energy Ties
This historic agreement represents a major expansion of energy cooperation between the two nations. Sources familiar with the deal confirm it is the largest ever between India and Russia, with an option to extend the contract for an additional ten years.
The deal comes as Russia pivots to Asian markets like India and China following Western sanctions over its invasion of Ukraine. These sanctions have forced Russia to sell its oil at discounted prices, making it an attractive option for India.
$13 Billion Annual Trade Boost
The deal accounts for approximately 0.5% of the global oil supply, with an estimated value of $13 billion annually. While Rosneft declined to comment, Reliance confirmed its collaboration with international suppliers, including Russian entities, but did not disclose further details due to confidentiality clauses.
According to insiders, Rosneft’s board approved the agreement in November. The announcement coincides with an upcoming visit to India by Russian President Vladimir Putin, underlining the strategic importance of the deal for both nations.
India Becomes Russia’s Top Oil Buyer
Russian crude now represents over one-third of India’s oil imports, making India the largest importer of Russian oil. This shift follows the European Union’s reduction in Russian oil purchases after imposing sanctions in 2022.
India’s access to discounted Russian oil, priced $3 to $4 per barrel lower than other suppliers, has also reduced its dependence on Middle Eastern producers like Saudi Arabia. As one of the fastest-growing energy markets in the world, India remains a critical focus for global oil exporters seeking to secure market share.
