Billionaire Mukesh Ambani's Reliance Industries Ltd has signed a deal to import crude oil worth USD 12-13 billion a year from Russia's Rosneft for 10 years, sources said. Russian state oil firm Rosneft will supply up to 500,000 barrels per day (25 million tonnes a year) of crude oil to Reliance, they said.
The 10-year deal at current prices is worth USD 12-13 billion.
Reached for comments, a Reliance spokesperson said Russia is currently the largest supplier of crude oil to India.
"We are always engaged with a number of international suppliers, including from Russia, for sourcing feedstock for our refinery. As per practice, such supply contracts are done for the following year. The number of cargoes will vary depending on economics given the prevailing market conditions," the spokesperson said.
India has become the second-biggest buyer of Russian crude oil since Moscow invaded Ukraine in February 2022, with purchases rising from less than one percent of the total oil imported in the pre-war period to almost 40 percent of the country's total oil purchases.
The rise was primarily because Russian crude oil was available at a discount to other internationally traded oil due to the price cap and the European nations shunning purchases from Moscow.
The EU/G7 countries in December 2022 introduced a price cap and an embargo on the imports of Russian crude oil in a bid to cripple the Kremlin's revenue and create a vacuum in its funding for the invasion of Ukraine.
India, the world's third-largest oil-consuming and importing nation, in October bought €2 billion worth of crude oil from Russia, down from €2.4 billion in the previous month. China bought 47 percent of Russia's crude exports in October, followed by India (37 percent), the EU (6 percent), and Turkey (6 percent).
Reliance has twin refineries at Jamnagar in Gujarat that turn crude oil into fuels like petrol and diesel. The firm sells the fuel to countries in Europe and elsewhere.
While the EU/G7 countries sanctioned crude oil from the Kremlin, a lack of a policy on refined oil produced from Russian crude meant that countries not imposing sanctions could import large volumes of Russian crude, refine them into oil products, and legally export them to the price-cap coalition countries.
While a price cap has been imposed on Russian crude, fuel exports are allowed at full price. Reliance spokesperson said the firm does not comment on specific details of any supply contract that are confidential in nature.
"As always, any such supplies are compliant with prevailing sanctions policies as applicable to Indian buyers of such feedstock," the spokesperson added. Reliance previously had a one-year deal to buy at least 3 million barrels of oil a month from Rosneft.
One of the two refineries that Reliance has at Jamnagar is only for exports. The 580,000-barrel-per-day unit exports all fuel it produces. The other 660,000 bpd unit is to cater to domestic requirements.
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