BRICS members Russia and India have announced a new $13 billion oil deal, the largest energy deal in history between the two countries. According to a Reuters report, Russia’s state oil firm Rosneft has agreed to supply nearly 500,000 barrels per day (bpd) of crude to Indian private refiner Reliance. The deal was reportedly discussed and agreed upon during a November board meeting.
The 10-year agreement amounts to 0.5% of global supply and is worth roughly $13 billion a year. According to sources familiar with the deal, the pricing and volumes will be reviewed annually, subject to change. The deal further strengthens the energy ties between two of the biggest members of the BRICS alliance. It also comes ahead of Russian President Vladimir Putin‘s upcoming visit to India.
BRICS Members Chalk Up Largest Oil Deal in Their History
Russian oil accounts for over a third of India’s energy imports. India became the largest importer of Russian crude after the EU imposed sanctions on Russian oil imports in response to the 2022 invasion of Ukraine. India has no sanctions on Russian oil, therefore, BRICS refiners are benefitting from the cheaper crude supply. Additionally, from January to October, Reliance imported an average of 405,000 barrels per day of Russian oil, up from 388,500 bpd in the same period last year, according to tanker data.
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Furthermore, the deal includes that Rosneft would deliver 20-21 Aframax-sized cargoes (80,000 to 100,000 metric tons) of various Russian crude grades and three cargoes of about 100,000 tons each of fuel oil each month, according to Reuters’ sources. The shipments will be supplied for Reliance’s refining complex, the world’s biggest, at Jamnagar in the western state of Gujarat. Rosneft nor Reliance have publicly commented on the new deal.
The deal is also on the heels of reports expecting the US to toughen its sanctions on Russia’s oil exports. According to Bloomberg, the new measures are being worked out to target Russian oil, weakening the country’s oil business. It will also affect other BRICS countries, as BRICS members were buying oil for cheap due to the sanctions.
