Rosneft, Russia’s state-owned oil giant, has reached an agreement to supply nearly 500,000 barrels per day (bpd) of crude oil to Reliance Industries (RIL), marking the largest energy deal ever between the two nations, according to three sources familiar with the arrangement. 

The 10-year deal, representing 0.5 percent of global oil supply, is valued at approximately $13 billion annually at current prices. This agreement is expected to strengthen energy ties between India and Russia, particularly as Russia faces heavy Western sanctions due to its invasion of Ukraine, as per a Reuters. 

Business Today was unable to verify the development independently. 

Rosneft has not responded to requests for comment, the report added. RIL declined to provide further details on commercial matters, citing confidentiality surrounding supply agreements. 

As part of the agreement, Rosneft will supply 20-21 Aframax-sized cargoes (80,000 to 100,000 metric tons) of various Russian crude grades and three cargoes of approximately 100,000 tons each of fuel oil per month. The shipments will be directed to Reliance’s Jamnagar refining complex in Gujarat, the largest refinery in the world. 

The agreement comes ahead of Russian President Vladimir Putin’s planned visit to India and follows comments from US President-elect Donald Trump, who indicated his intention to push for an end to the war in Ukraine once he assumes office in January.  

This deal accounts for around half of Rosneft’s seaborne oil exports from Russian ports, leaving limited availability for other traders and intermediaries, the Reuters report added. 

India has no sanctions on Russian oil, allowing its refiners to benefit from lower-priced crude. Due to sanctions, Russian oil is being sold at a discount of at least $3-$4 per barrel compared to rival grades. 

The competition among oil producers for a share of India’s market is intensifying as the country is one of the fastest-growing energy markets and plays an increasingly significant role in global demand, especially as China’s growth slows. 

India, the world’s third-largest oil importer and consumer, has become the leading buyer of seaborne Russian crude after Western nations stopped purchasing it in response to Russia’s invasion of Ukraine in 2022. India has also been making payments for Russian oil in rupees, dirhams, and Chinese yuan. 

Earlier this year, Reliance, controlled by Mukesh Ambani, signed a one-year deal with Rosneft to purchase at least 3 million barrels of oil monthly in roubles. This deal followed Russian President Putin’s push for Moscow and its partners to find alternatives to the Western financial system to facilitate trade despite US and European sanctions. 

In 2024, reports indicated that the Indian government had urged state-run oil refiners and Reliance Industries to negotiate a long-term supply deal with Russia. The government sought to secure at least 33% of the contracted supply from Russia at a fixed discount to help protect India’s economy from volatile prices, according to sources. 

Meanwhile, state-owned Indian refiners have been purchasing Russian oil on the spot market, as they were unable to finalize term contracts for this year.