India and Russia Sign a Landmark Oil Supply Agreement

Russia's state oil firm, Rosneft, has signed a landmark agreement to supply nearly 500,000 barrels per day (bpd) of crude oil to Indian private refiner Reliance Industries. This represents the largest-ever energy deal between the two countries, according to three sources familiar with the matter. The 10-year agreement, valued at approximately $13 billion annually at current prices, accounts for about 0.5% of the global crude supply. This deal underscores the deepening energy ties between India and Russia, even as Moscow faces stringent Western sanctions over its 2022 invasion of Ukraine.

Rosneft declined to comment on the deal, while Reliance stated that it collaborates with international suppliers, including Russia, based on market conditions. The company refrained from further details, citing the confidentiality of its supply agreements.

This development comes in the lead-up to a planned visit by Russian President Vladimir Putin to India. It also follows comments from U.S. President-elect Donald Trump expressing his intention to mediate the conflict between Russia and Ukraine once he takes office.

India has become the largest importer of Russian crude oil after the European Union, the previous top buyer, imposed sanctions on Russian oil imports. With no sanctions in place on Russian oil, Indian refiners have capitalized on discounted crude, which is typically $3–$4 per barrel cheaper than other grades.

This surge in Russian oil imports has reduced India’s reliance on Middle Eastern suppliers, posing increased competition for nations like Saudi Arabia. The Reliance-Rosneft deal further consolidates Russia’s position in India’s energy market, which now sources over a third of its crude from Russia.