Amid changing global dynamics in the energy sector, three of India’s leading state-owned refineries are actively working with Russia’s Rosneft to establish long-term partnerships for the purchase of Russian oil. This development, as reported by Bloomberg, underscores India’s strategic maneuvers to secure stable energy sources.
The three interested companies – Indian Oil, Bharat Petroleum and Hindustan Petroleum – are seeking to formalize long-term agreements on the supply of Russian oil to India, counting on a total import volume of 500 thousand barrels per day.
The talks between the parties are expected to delve into various aspects, including payment terms and currency considerations acceptable to both sides. They are also expected to discuss logistics, including the search for new intermediaries and banking channels.
Indian Oil’s previous cooperation with Rosneft, which was marked by the signing of a long-term contract in 2020, emphasizes the strategic need to diversify oil procurement routes in India. For Bharat Petroleum and Hindustan Petroleum, this is a potential first step towards such arrangements.
India’s non-alignment with sanctions against Russia and its neutral position during the Russian-Ukrainian war created a favorable environment for strengthening ties with Moscow. Together with China, India has demonstrated an assertive stance on increasing oil imports from Russia, taking advantage of the decline in prices amid declining global demand.
India’s sharp increase in Russian oil imports, a trend catalyzed by Russia’s invasion of Ukraine, has changed the country’s energy landscape. While imports were insignificant until 2022, India now boasts a daily consumption of approximately 1.5 million barrels of Russian oil, eclipsing traditional suppliers such as Iraq and Saudi Arabia.
However, over time, sanctions may cut off this source of cheap energy for India, and the market will change again. It seems to be only a matter of time.
