BIG move by Mukesh Ambani's Reliance Industries, inks massive 10-year deal with Russia's Rosneft for supply of...

In a landmark agreement, Russia's state oil company Rosneft has committed to supplying nearly 500,000 barrels of crude oil per day to Mukesh Ambani’s Reliance Industries. This 10-year deal, valued at approximately $13 billion annually at current prices, is the largest energy collaboration between India and Russia, according to a Reuters report.

The agreement represents about 0.5% of the global oil supply and strengthens energy ties between the two nations amid Western sanctions on Russia due to its invasion of Ukraine. While Rosneft did not comment on the deal, Reliance stated that its agreements with international suppliers, including those from Russia, are based on market conditions, according to the report.

Notably, the Russian oil is cheaper by $3 to $4 per barrel compared to other grades, giving Indian refiners a competitive edge. The partnership further challenges West Asian suppliers, such as Saudi Arabia, as competition intensifies in India, one of the fastest-growing energy markets globally.

According to a Reuters report, \the shipments, set to begin in January, will supply Reliance’s Jamnagar refinery complex in Gujarat, the world’s largest. Rosneft will deliver about 20 Aframax-sized cargoes of crude and three fuel oil shipments monthly. Pricing and volumes will be reviewed annually to reflect market conditions.

This deal accounts for nearly half of Rosneft’s seaborne oil exports and reduces availability for other buyers. The majority of the supply will consist of medium-sulphur, diesel-rich Urals crude.

The agreement comes ahead of a planned visit by Russian President Vladimir Putin to India.